DTN Closing Livestock Comments

GENERAL COMMENTS: Lean hog futures saw firm gains Tuesday as increased buyer support is starting to filter back into the market now that traders appear content that the lows have been set. Live cattle futures were mixed in sluggish trade as traders look for increased underlying support. The April contract moved higher. Limited direction was seen in cash cattle trade through the end of the day Tuesday. Bids and offers were still undeveloped, as both sides appear to be waiting for the other side to show their hand first. Interest is expected to improve through the next couple of days, although trade may not develop until Friday. The National Daily Direct afternoon hog report was $0.36 lower ($41.50-$46.25, weighted average $44.55) on 17,315 head sold. Corn futures were higher in light activity with May up 1 cent per bushel. The Dow Jones Index was 13 points lower with the Nasdaq down 2 points.

LIVE CATTLE: The spot April live cattle contract stabilized on strong fundamental support. Overall, futures closed mixed, $0.20 lower to $0.47 higher. Compared to wide market losses Monday, the live cattle complex stabilized as traders became more focused on longer-term direction and the continued support seen in cash and wholesale beef markets. This allowed the April futures contract to trade 47 cents per cwt higher, cutting into the early week losses. Although concern remains that futures may not be able to move through long-term resistance of $130, the ability to narrow the trading range would help solidify long-term buyer interest. Beef cut-outs: higher, up $0.58 (select, $217.79) to up $0.49 (choice, $224.04) with fairly light demand and light offerings, 115 loads (78 loads of choice cuts, 18 loads of select cuts, 5 load of trimmings, 14 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL: Steady. Little market direction is expected to be seen early Wednesday with bids and asking prices still undeveloped. At this point, both sides will likely become slightly more active, but with most feeling that active trade will be delayed until later in the week, there seems to be no hurry to offer bids or asking prices too early.

FEEDER CATTLE: Firm pressure developed in feeder cattle trade Tuesday as traders backed away from early week support. Futures settled $0.32 to $1.05 lower. The buyer support seen Monday eased Tuesday as traders' attention seemed to move away from weather concerns. Though challenges remain for livestock production and calving, the focus moved to the general lack of support in live cattle trade over the last couple of sessions. Late-summer contracts saw the most aggressive pressure, falling $1.05 per cwt. CME cash feeder index for 3/4 is $139.63, up $0.04.

LEAN HOGS: Lean hog futures settled $0.07 to $1.12 higher on firmness in cash and pork values. Traders seem to have officially turned the corner in the lean hog futures trade, as firm support was seen through most contracts Tuesday. Both nearby and deferred prices advanced, although the complex continues to trade in the lower half of the wide trading range seen over the last couple of months. With April contract trading nearly $5 per cwt above February lows, the focus on continued support is sparking additional interest. Pork cutouts trickled lower with mixed primal values as active trade allowed for increased price shifts in a narrow-to-moderate range. Pork cutout values fell $0.34 per cwt, moving to $62.59 per cwt on 472 loads. CME cash lean index for 3/1 is $51.93, down $0.20. DTN Projected lean index for 3/4 $51.94, up $0.01.

WEDNESDAY'S CASH HOG CALL: Steady to $1 higher. Limited buyer support is moving into the market following the renewed interest in futures trade and recent pork support. Most bids are expected to be seen steady to 50 cents higher, with cautious optimism expected through the rest of the week. Wednesday slaughter is expected at 477,000 head. Saturday runs are expected near 186,000 head.

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

(CZ)

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