DTN Midday Livestock Comments

General Comments

Firm buyer interest quickly swept through livestock trade early Friday morning, although lack of volume quickly turned markets lower at midday. Live cattle trade is holding prices steady to 50 cents lower with traders unable to maintain gains above $130 per cwt. Mixed hog prices are focusing on underlying pressure in deferred contracts as traders adjust positions late Friday morning. Corn futures are lower in sluggish trade. May corn futures are 4 cents lower. Stock markets are higher in light trade. Dow Jones is 46 points higher with Nasdaq up 30 points.

LIVE CATTLE:

Initial support in live cattle trade has quickly evaporated late morning with April live cattle futures quickly backing away from session highs. Front-month futures have fallen more than $1 per cwt from initial morning gains with April contracts holding 50 cent losses, trading at $129.35 per cwt. Even though prices broke through resistance levels of $130.10, the inability to hold these price levels at closing bell would be viewed as generally bearish, potentially sparking additional market weakness through the next couple of weeks. Cash cattle is expected to trade at some point through the day, although sales may be delayed until later in the day. Bids are firming in some areas with live bids at $125 while dressed bids have improved to $204 to $205 per cwt. Asking prices remain at $130 and higher live and $206 to $208 dressed. Late morning reports indicate that a few cattle have started to trade at $205 dressed in parts of the north. This would be $3 per cwt higher than last week. Boxed Beef cut-outs at midday are higher, $1.42 higher (select) and up $1.02 per cwt (choice) with light movement of 40 total loads reported (21 loads of choice cuts, 6 loads of select cuts, 3 loads of trimmings, 10 loads of ground beef).

FEEDER CATTLE:

Gains are holding in feeder cattle trade with contracts posting 50 to 80 cent gains in limited to moderate activity levels Friday. The initial strong market rally seen during early hours of trade was limited due to very sluggish market activity and end-of-week positioning expected to develop.

LEAN HOGS:

Trade is confined to narrow to moderate market moves late Friday morning following the inability for active buyer support to hold during initial March trade. April contracts are still hanging onto moderate 40 cent gains, although the shift from initial triple­-digit gains seemed to quickly dash any expectations and hopes of an aggressive end-of-week market rally. Traders are slowly focusing on potential short- and long-term market shifts, although late-day trade is expected to remain extremely sluggish. Cash prices are unreported at this time on the National Direct morning cash hog report. Cash prices are unreported at this time on the Iowa/Minnesota Direct morning cash hog report. Pork carcass values moved higher once again in limited volume based on firming underlying market support. Pork cutouts rallied $1.79 per cwt at $62.28 per cwt with 115 loads traded. Lean hog index for 2/27 is $52.64, down $0.18, with a projected two-day index is $52.13, down $0.51.

Rick Kment can be reached at rick.kment@dtn.com

(CZ)

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