Tuesday Closing Livestock Market Summary

Closing Comments 

Cash cattle markets remain untraded Tuesday afternoon, which is typical for this time of week. Initial bids have developed during the day with bids in the South seen at $126 per cwt while Northern bids are seen at $210 per cwt. Asking prices are still hard to get a handle on, but the few seen are at $130 to $131 in the South and $212 and higher in the North. Trade could be seen Wednesday given the trend over the last several weeks, but it is most likely that cattle movement will be seen later in the week. Packers and feeders are likely to also factor in the upcoming USDA Cattle on Feed report on Friday. This could delay some cash business during the week. According to the closing report, the national hog base is $0.22 higher compared with the Prior Day settlement ($60.00-$67.50, weighted average $66.12). The corn trade slipped lower in light activity. May futures posted a 2-cent loss Tuesday. The Dow Jones Index is 237 points lower with the Nasdaq down 107 points.

LIVE CATTLE

Strong buyer support quickly moved into live cattle futures despite the lackluster interest at opening bell. Aggressive market support ($0.05 to $1.25 higher) quickly redeveloped during the morning as commercial buyers moved into nearby contracts. April and June futures broke through resistance levels. April contracts closed at $119.90 per cwt, after moving above the Jan. 19 high of $119.87 per cwt. June futures traded at the highest level in a year. March 21, 2016, was the last time that June live cattle contracts traded above $111 per cwt. This underlying support across the live cattle market could spark additional buyer support Wednesday. Beef cut-outs: higher, $1.44 higher (select, $215.41) to up $1.17 (choice, $224.93) with moderate-to-good demand and moderate-to-heavy offerings (73 loads of choice cuts, 24 loads of select cuts, no loads of trimmings, 14 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 Higher. Cattle trade is expected to develop in the second half of the week, although the potential of another week of Wednesday trade exists, there could be some pushback in the market given the Cattle on Feed report at the end of the week. At this point, cash markets are expected to remain steady to higher given the underlying support in the market.

FEEDER CATTLE

Moderate-to-firm buying developed despite the sluggish early start in feeder cattle trade Tuesday ($0.17 to $0.90 higher). Traders remained generally unsupportive of additional rapid gains in the feeder cattle complex through most of the session. But the continued gains seen in live cattle markets, which helped push prices through short-term resistance, once again brought buyers back to the table at the end of the session. Deferred futures saw the most aggressive buyer support, while very little interest was shown in most nearby contract months. CME cash feeder index: 3/20: $129.95, up $0.25.

LEAN HOGS

Lean hog futures continue to erode with pressure over the last week accounting for a price pullback of nearly $3 per cwt. Front-month April contracts closed at $68 per cwt, with a 65-cent loss. Moderate-to-strong losses developed in most nearby and deferred futures ($0.20 to $1.17 per cwt lower). Even though prices have been unable to draw buyer support back to the market during mid-March, trade remains within the sideways trading range and $1.50 per cwt above short-term support levels. With shifting fundamental market direction seen through the spring and technical factors not yet in place, lean hog trade could continue to chop around in the wide trading range over the near future. Carcass values are lower. Sharp pressure in bellies and light-to-moderate softness in loins, butts, and picnics offset strong gains in ribs and hams. Pork cut-out: $80.96 down $0.50. CME cash lean index for 3/17: $71.61, down $0.13. (DTN Projected lean index for 3/20: $71.48, down $0.13).

WEDNESDAY'S CASH HOG CALL

Steady to $1 lower. Consistency is expected to be seen through midweek with packers continuing on the previous pace to secure needed hogs for weekly runs. The expectation is that hog numbers continue to become available, allowing initial bids to remain mostly steady to 50 cents lower. The mild weather in many areas is limiting processing or delivery delays. Plan runs Wednesday are estimated at 430,000 head. Saturday runs are expected to be at 135,000 head.