DTN Early Word Livestock Comments

Cattle: Higher Futures: Mixed Live Equiv: $220.65 -$0.61*

Hogs: Mixed Futures: Mixed Lean Equiv: $95.33 -$0.44**

*Based on formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. Index has been updated to depict recent changes in live cattle weights and grading percentages.)

** based on formula estimating lean hog equivalent of gross packer revenue.

GENERAL COMMENTS:

Cattle traders did not have much direction Monday. There was no interest in the cash market and boxed beef prices were not providing much support. Boxed beef was mixed on the midday report and closed the day lower with choice down $1.11 and select down $0.31. Fundamentally, the market seems to be supported, but some traders took some profits, and hedgers sold at these higher prices. Slaughter is back on track with packers seeming to be light on supplies. This may make them more aggressive in procuring cattle this week. The Biannual Cattle Inventory report will be released Wednesday. May feeder cattle futures closed the chart gap remaining from Oct. 23, 2023. The March and April contracts have gaps that have yet to be closed.

Hog futures drifted throughout Monday's trade. Traders could not find much to provide direction. More of the same may be seen Tuesday. The National Daily Direct midday and afternoon reports provided no direction as cash was not posted due to packer confidentiality issues. This was likely due to very limited cash activity in the country. The report was that only 75 head of hogs were traded. Pork cutouts showed some weakness with prices declining by $0.44. Slaughter was strong, indicating good demand is taking place.

	BULL SIDE		BEAR SIDE
1)	Cattle futures made higher highs again Monday, which keeps the uptrend intact even though contracts closed lower.	1)	Cattle futures will need to find buyer support, or the market could be in for a larger price retracement.
2)	Packers had not purchased many cattle ahead last week, which may require them to be more aggressive this week.	2)	Lower boxed beef may keep some pressure on the market Tuesday as weekend demand may not have been as good as hoped. Choice cuts are back below $300.
3)	April hog futures closed above chart resistance Monday, which may trigger further buying Tuesday.	3)	Hog futures are overbought and may be ripe for a price retracement as positions are liquidated. The end of the month could see some selling pressure.
4)	If the report of very limited hog purchases Monday is correct, packers will need to be more aggressive Tuesday and may pay more to get them.	4)	The weakness of cutouts Monday may put some initial pressure on trading activity Tuesday.

**

For our next livestock update, please visit our Midday Livestock comments between 11 a.m. and noon CST. Also, stay tuned to our Quick Takes throughout the day for periodic updates on the futures markets.

Robin Schmahl can be reached at rschmahl@agdairy.com

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