Walsh Trading Daily Insights
Commentary
The cattle and hog markets continued their plunge on Friday as the June and July Hogs and April Cattle markets settled the expanded limit down keeping the expanded limits in place for Monday’s session. Feeder Cattle also were weak but will have normal limits for Monday. Continued uncertainty around the Covid-19 virus continues to plague the livestock markets. High production levels, retail demand worries, restaurant closures, cutout prices declining, plant shut downs, possible future plant shut downs, etc are weighing on futures prices as traders try to come to grips with this escalating malady on our society. With cities, states and nations on a seemingly endless nightmare of stay at homes, shut downs social distancing, etc… traders continue to push futures lower as they try to find a place to attract buying. Basis levels are way out of whack as cash market levels are much higher than futures. The futures collapse has brought down cash prices as packers use the futures decline to their advantage. Governmental efforts to create lifelines to citizens by handing out cash have taken too long as partisan battles overrule help for the people. Even with passages of bills to help people stay afloat, the length of time to implement these bills and the rules involved in getting money out to businesses and people are confusing at best. Doctors, nurses, police and firemen and women are doing all they can to alleviate suffering but can’t get people back to work. The disease continues its march and until it slows down markets will continue to be volatile and on a destructive path, in my opinion. We are at prices levels not seen for years in the livestock markets for this time of year and the losses producers are facing as prices decline is staggering. When this disease will pass is unknown but researchers are diligently working on vaccines and treatments. What will our country and the world look like after this has run its course? Will it run its course? Working from home is not fun…not socializing with peers, friends and family is not fun…. This is frustrating and demoralizing…May everyone stay healthy and for those that get sick…. may you get well! In the Southern Plains and Western Cornbelt, cash trading has been at a standstill. In Nebraska negotiated cash trading has been inactive with very light demand. Not enough trades for a market trend. Some dressed sales took place between 165.00 and 168.00. Boxed beef cutout values were lower on light demand and light offerings. Choice cutouts declined 2.20 to 230.44 and selected dropped 6.28 to 215.84. The choice/ select cutout spread widened to 14.60 and the load count was 110. Slaughter is expected to be 107,000 for Friday and 52,000 for Saturday bringing the expected weekly total to 626,000 lower than last year’s 627,000. The Feeder Cattle Index fell to 126.09 as of April 1, 2020. The Lean Hog index fell to 63.08 as of April 1, 2020 and the Pork Cutout Index sank and is at 66.13 as of April 2, 2020. Stay tuned….
Trade Suggestion(s)
Risk/Reward
Futures – N/A
Options – N/A
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays and our next webinar will be on Thursday, April 9,2020 at 3:00 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
www.walshtrading.com
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