DTN Closing Livestock Comments

Late-Week Bears Regroup to Smash Lean Hog Futures

(DTN file photo)

Closing Comments

Light-to-moderate cattle sales developed late Friday, though not enough to produce significant week-to-date trade volume totals. A decent test became evident in the South Friday afternoon at $130.00, generally $2.00 higher than last week. On the other hand, dressed business in the North remained light, ranging from $210.00-$212.00 (mostly $212.00, $4.00-$5.00 higher). The national hog base closed off $0.65 compared with the Prior Day settlement ($60.00-$66.00, weighted average $64.38). From Friday to Friday, livestock futures scored the following changes: Apr LC Up $2.78; Jun LC up $3.18; Mar FC Up $2.05; May FC Up $3.43; Apr LH Off $1.78; May LH Off $1.40. Corn futures closed fractionally lower at the conclusion of a defensive week. Buying interest continues to be difficult to find thanks to fears of record South American production. The stock market closed mixed with the Dow off 59 points and the Nasdaq better by 11.

LIVE CATTLE

Futures closed mostly lower, off 50 to up 32. Although this market traded significantly higher for most of the session, the reality of late-developing cash and on feed uncertainties seemed to trigger long-liquidation past mid-session. Note that spot April closed 110 points below session highs. The March 1 on feed report turned out to be generally neutral with all three categories coming in close to trade expectations: on feed 100%; placed in February 99%; marketed in February 104%. Beef cut-outs: steady to weak (Choice, $221.62 off $0.66, Select $215.55 off $0.22) on light-to-moderate demand and moderate offerings (50 loads of choice cuts, 22 loads of select cuts, 04 loads of trimmings, 25 loads of coarse grinds).

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MONDAY'S CASH CATTLE CALL:

Steady. Activity in feedlot country will be typically slow on Monday as packers focus on the distribution of new showlists. We expect ready numbers to be steady to somewhat larger.

FEEDER CATTLE

Futures closed mostly modestly lower, off 35 to up 22. A choppy trading pattern similar to the live market was seen here. Nevertheless, the feeder trade enjoyed a solid week of progress, supported by technical buying, renewed strength in the cash index and decent commercial buying interest. CME cash feeder index: 03/23: $132.46, up $0.88.

LEAN HOGS

Futures closed sharply lower off 27-207. Thursday's spark of bullishness clearly didn't last long with bears taking back pretty much all of the progress Friday. Spot April closed well below its 40-day moving average, and June through August once again plummeted below 100-day moving averages. The market seems to swing between enthusiasm over export demand and worries regarding larger domestic production. Pork cut-out: $78.48 (FOB Plant) up $0.99. CME cash lean 03/22: $71.29, off $0.12 (DTN Projected lean index for 03/23: $70.91, off $0.38).

MONDAY'S CASH HOG CALL

Steady to $1.00 lower. Look for hog buyers to start out Monday with defensive bids, mindful of plentiful supplies and board discounts.

John A. Harrington can be reached at john.harrington@dtn.com

(ES)

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