DTN Early Word Livestock Comments

Cattle: Steady Futures: Mixed Live Equiv: $243.07 -$1.14*

Hogs: Lower Futures: Mixed Lean Equiv: $97.85 +$0.31**

*Based on the formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. The 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 futures were surprisingly strong with live cattle futures leading the way. Optimism over continued strong beef demand is providing support with gains in futures over the past four consecutive days. The consensus is for cash to trade no less than steady with last week and some anticipate higher prices. No cattle have traded so far this week as feedlots are holding out in the anticipation that packers will step up. Boxed beef prices did not perform well Wednesday with choice down $1.90 and select down $0.85. The Cattle on Feed report will be released Thursday. The average estimate for on-feed numbers on April 1 is 98.3% of a year ago, with a range of 97.5% to 99.0%. March placements are estimated at 103.7% with a range of 99.0% to 106.4%. Marketings are estimated at 100.7% with a range of 99.0% to 101.5%. Thursday is the last trading day of the week, with the markets closed on Good Friday.

Hogs found strong technical buying interest as technical traders seem to be intent on closing the chart gaps remaining from two weeks ago. Cash and cutouts have not been trending higher but continue to remain choppy. However, that does not mean demand is lackluster as the slaughter pace remains strong. The average weight for hogs declined by one pound last week to 291.0 pounds. Pork demand is expected to improve as the grilling season unfolds, keeping prices supported. The National Daily Direct Afternoon Hog report showed cash up $0.38. Packers are not expected to be aggressive Thursday as they have purchased most of their weekly needs. Pork cutout values increased by $0.31 on Wednesday. Slaughter will be disrupted this weekend with Good Friday slaughter expected at 432,000 head, Saturday slaughter at 22,000 head, and Monday slaughter at about 368,000.

	BULL SIDE		BEAR SIDE
1)	Cash cattle are expected to trade no less than steady this week, supporting futures.	1)	Traders could liquidate some of their recent long positions ahead of the Cattle on Feed report, putting some pressure on the market.
2)	Later live cattle futures contracts still have chart gaps to fill above the market.	2)	Cash cattle could trade lower as packers have already purchased some cattle ahead and may not need to be aggressive.
3)	Weekly hog weights declined one pound to an average of 291.0 pounds. Weights should continue to decline as summer moves closer.	3)	Hog futures have increased on technical trade and the anticipation of higher pork prices. Cash and cutouts have not been supportive.
4)	The October and later hog futures contracts have chart gaps above the market that may be filled.	4)	The weekly hog weights averaged 291.0 pounds and are 3.0 pounds higher than a year ago.

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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