DTN Midday Livestock Comments

Active Buying Pushes Livestock Futures Firmly Higher Monday

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Russ Quinn)
GENERAL COMMENTS:

Firm support is seen through livestock futures Monday morning as cattle and hog futures have sparked additional and strong price support. The focus on cash market activity developing through the week continues to be the primary driver of recent buyer interest. Corn prices are lower in light trade. March corn futures are 3 cents lower. Stock markets are mixed in light trade. The Dow Jones is 34 points lower while Nasdaq is up 6 points.

LIVE CATTLE:

Moderate buyer support is stepping back into the live cattle complex. Gains through the morning have remained incredibly stable despite the mixed moves in beef values and aggressive renewed support seen across the feeder cattle market. April live cattle futures are holding gains from 60 to 70 cents per cwt at midday, while summer and fall contracts are currently holding gains near $1 per cwt. Continued focus is being placed on the discount between April and June contracts, which stands at $10 per cwt. This price shift will continue to cause cautiousness through the complex through the next several weeks. Cash cattle markets with bids and asking prices still undeveloped at this point. Show lists for the week are generally higher with numbers lighter in Kansas, but slightly to moderately higher in most other regions. Cash activity is not expected to be seen until midweek or later. Beef cut-outs at midday are mixed $1.32 higher (select) and down $0.69 per cwt (choice) with light movement of 57 total loads reported (32 loads of choice cuts, 13 loads of select cuts, no loads of trimmings, 12 loads of ground beef).

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FEEDER CATTLE:

Strong gains continue to hold in feeder cattle trade with buyers focusing on the ability to hold triple-digit support in all nearby contracts. March through September contracts are holding gains over $1 per cwt with the most aggressive support developing in the April contracts. Feeder cattle gains have continued to lead the entire cattle market higher through the morning as traders build on the renewed buyer support seen through the end of last week.

LEAN HOGS:

Strong triple-digit gains have held through most of the morning, although the tone of the market remains unable to bring additional support back into April contracts at this point. April futures are leading the market higher with $1.50 per cwt gains, but still trading at a significant discount to both May and June contracts. Triple-digit gains are holding through August contracts with strong momentum expected to help solidify additional buyer activity into the complex. Deferred lean hog futures have slipped lower through the morning with additional uncertainty expected to be focused on long term supply growth in the industry. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.27 at $66.03 per cwt with the range from $65.11 to $67.50 on 4,595 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 123 loads selling with prices adding $1.50 per cwt. Lean hog index for 3/9 is at $72.51 down $0.08 with a projected two-day index of $72.14 down $0.37.

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

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Rick Kment