Friday Morning Livestock Market Summary

GENERAL COMMENTS:

The week-long showdown that has endured all week in cattle country will have to find some form of resolution Friday (i.e., at least light-to-moderate trade volume in major feeding areas). Packers are both short bought and mindful of narrowing margins. Feedlot managers are both confident of tight front-end supplies and nervous in the face of deep board discounts. Asking prices are around $128 plus in the South and $205 plus in the North. Bids are likely to start out around $122 in the South and $200 in the North. Live and feeder futures should open moderately higher, supported by follow-through buying and ongoing ideas of cash premiums.

Hog buyers have pretty much focused on a defensive procurement strategy though the week, and there's little reason to think they'll shift to "Plan B" Friday. Expect another round of bids ranging from steady to $1 lower. Estimates of the Saturday kill have now grown to 89,000 head. Lean futures are set to open higher, boosted by residual buying interest from Thursday and pre-weekend profit-taking.

	BULL SIDE		BEAR SIDE
1)	Beef exports totaled 90,417 metric tons in February, up 9% year-over-year, with value up 16% to $508.5 million. Through February, beef exports were up 13% in volume (186,905 MT) and 17% in value ($1.02 billion).	1)	Whole beef prices continued to bleed on Thursday with the choice cutout dipping lower for the 12th consecutive session. Since March 21, the choice box has imploded by $17.03.
2)	Net export sales of beef last week totaled 19,300 MT, up 78% from the previous week and 32% from the prior four-week average.	2)	Open interest in live cattle futures remains historical large near 390,000 plus (i.e., more than 100,000 loads greater than last year at this time. If the cash market starts to buckle big time, panicky psychology could trigger a huge wave of long liquidation.
3)	Pork exports reached 197,025 MT in February, up 15% year-over-year, with value up 17% to $486.7 million. For the first two months of 2017, exports totaled 399,692 MT, up 18%, with value increasing 22% to $995.3 million.	3)	Though nice to see, Thursday's rally in meat futures could hardly be called technically significant. "Dead-cat bounces" would be more like it. Follow-through buying interest before the weekend break could be tough to muster.
4)	Net export sales of pork last week totaled 21,500 MT, up 2% from the previous week and 5% from the prior four-week average. Actual pork shipments for the same period totaled 22,300 MT, up 3% from the previous week.	4)	With week-to-date hog slaughter running 5,000 head over last week's high tide, the wholesale pork trade keeps struggling to find sufficient demand to handle early spring tonnage. Carcass value stumbled further on Thursday, pressured by softening demand for bellies, ribs and butts.

OTHER MARKET SENSITIVE NEWS

CATTLE: (Radio Iowa Contributor) -- The U.S. beef industry is asking President Trump to help get American beef back into China.

President Trump is scheduled to meet with Chinese President Xi Jinping Thursday and Kent Bacus with the National Cattlemen's Beef Association (NCBA) says they're urging Trump to raise the issue of U.S. beef access during that meeting.

"We need someone who is a master negotiator, someone who can close the deal," Bacus says. "President Trump has really sold himself as that person and we think this is a great opportunity to show what he's worth." China banned U.S. beef in 2003 after the BSE scare. The ban was finally lifted last fall, but China still has not resumed purchases from the U.S.

"We're one of the leading exporters in the world and yet we don't have access to the Chinese market — even though some of our competitors, who do not have the same safety designations as ours, do have access to that market," Bacus says. "So, we're trying to move past all of these obstructions and these obstacles and get access into one of the biggest markets in the world."

The issue resurfaced last month when China briefly halted imports of Brazilian beef over a meatpacking scandal in that country, but the U.S. was never mentioned in news reports as a viable, alternative source of beef for the Chinese. A letter to Trump was signed by leaders of NCBA, the U.S. Meat Export Federation and the North American Meat Institute.

According to the Iowa Beef Industry Council, Iowa has 965,000 beef cows — the 9th most among the 50 states. Texas is number one on that list, followed by Nebraska.

HOGS: (foodmarket.com) -- Easter ads are in full bloom at retail, with holiday promotions picking up speed and set to be full-fledged next week. Circular themes are centered around family gatherings and impressive table-scapes, hoping to draw shoppers into the store with attractive features and holiday enthusiasm.

The Easter egg hunt has begun as consumers seek out the best deals on dozens. The Midwest large wholesale market has been steady the last few weeks after rallying more than 40%. Still, prices failed to reach the dollar mark for the holiday, allowing retailers to promote aggressively, helping consumers to fill their Easter baskets with eggs priced lower than a year ago.

Grocers in some regions are utilizing hams as loss-leaders at retail ahead of the Easter holiday. Feature prices for bone-in varieties range from $0.34 to $1.49 per lb. Spiral-sliced hams average $1.65 per lb. on feature. On average, these prices are lower than year ago levels and are sure to draw some attention at the meat case both for holiday needs and otherwise, as consumers may choose to take advantage of these price levels and stock up. The wholesale ham market dipped to multi-year lows in Q1 2017, allowing for grocers to secure their needs in advance of the holiday at attractive prices. This in turn enabled retailers to aggressively feature hams in an attempt to drive store traffic.

Holiday alternatives to the traditional ham include turkey, lamb, and various roast options. In the beef complex, bottom round roasts are featured 46 cents below year ago at $3.37 per lb. Eye round roasts average $4.03 per lb., on par with year ago levels. Tenderloin roasts average $7.95 per lb.

The Christian Lenten season will end next week on Thursday, April 13. This will mark the end of a fasting period in which many observers give up meat-eating on Fridays, along with various other vices, habits or indulgences throughout the period. During this time the seafood counter benefits over the meat case as demand for fish spikes among a large portion of consumers. In addition to the completion of Lent, Easter will mark the first holiday of Spring and increasingly warmer weather will further promote meat and poultry sales at retail.

This week, beef features claim 27% of ad volume, while seafood takes 25%. Chicken and pork features make up 19% of ad space each. Turkey ads account for 4%, while eggs round out with 3%.