Look for the cash cattle to slowly open with bids near steady to those seen on Tuesday (i.e., $127 to $128 live/$204 to $205 dressed). Asking prices should be around $129 plus dressed and $207 plus dressed). Feedlot ideas could certainly regroup if the board starts moving back toward early-year lows. The South is probably done for the week, but the North needs to do more work (either Thursday or Friday). Live and feeder futures should open on a mixed basis with trading attitudes torn between large cash premiums and technical defensiveness.
Hog buyers should resume business Thursday with another round of steady to $1 lower bids. At this time, Saturday kill plans are expected to total close to 119,000 head, probably enough to push the weekly slaughter to around 2.42 million. Lean futures should begin with moderate price pressure tied to bearish fundamentals.
| BULL SIDE | BEAR SIDE | ||
| 1) | Reacting to evidence of great packer spending, spot April live gapped higher on the opening and surged by triple-digits on Wednesday. | 1) |
Despite a strong start on Wednesday, cattle futures didn't have enough gas to power through major overhead chart resistance. For example, spot April live knocked briefly on the technical door of $124 to $124.50 but was met with significant selling, closing 100 points plus below potential break-out.
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| 2) |
Not only have cattle buyers written bigger checks this week, some have spent top money for steers and heifers to be delivered in the first week of April. Such delayed delivery specs suggests a high level of confidence in short-term fundamentals.
| 2) |
Second quarter live cattle futures are mired in deep discounts largely because of huge beef supply expectations. Currently, the government is estimating second quarter beef tonnage at close to 7.2 billion pounds, perhaps as much as 13% greater than April June 2017.
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| 3) |
For the week ending March 10, Iowa barrows and gilts averaged 286.2 pounds, .2 lbs. lighter than the week before and 4.3 lbs. heavier than 2017. We should be close (or even past) the seasonal peak on live weights and set to steadily decline through midsummer.
| 3) |
For the week ending March 10, U.S. hatcheries set 227 million eggs in incubators; up 2% from a year ago. At the same time, chicks placed in the United States numbered 183 million. up 1% from a year ago.
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| 4) |
Summer lean hog futures were well supported at midweek, reconfirming dependable support at 77. August managed to close back above the psychologically important level of 80.
| 4) |
The brief honeymoon in the wholesale pork trade came to an abrupt end at midweek when faltering demand in bellies and loins caused the cutout to implode by $2.34.
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CATTLE: (Dow Jones) -- Cattle ranchers are relieved that controversial new trucking rules are being delayed further for agricultural commodity transporters. Federal regulators recently issued a mandate that required truckers to place electronic logging devices in their vehicles, designed to enforce an 11-hour limit on time behind the wheel. A 90-day stay for the agricultural industry was due to expire Sunday; that has now been extended for a further 90 days.
Trade groups like the US Cattlemen's Association argue that the rules would endanger livestock by forcing truckers with cars full of live animals to get off the road. The association now wants regulators to exempt the industry from those time limits when traveling within an 150-air-mile radius of the source.
HOGS: (Food Safety News) -- Northern Ireland's raw pork exports to the United States may continue after a favorable on-site audit of that country's meat inspection system by USDA's Food Safety and Inspection Service (FSIS).
FSIS let Northern Ireland's Chief Veterinarian Robert Huey know the draft final report of the audit was available by letter on Jan. 3, 2018 and the agency published both the letter and draft final report on the agency's website on March 12.
FSIS auditors conducted their on-site examination of Northern Ireland's meat inspection system from Sept. 18 to Sept. 26, 2017. The Belfast exit meeting with the Irish authorities, which FSIS refers to as the Central Competent Authority or CCA, was held on the final day.
"The FSIS auditor concluded that Northern Ireland's meat inspection system is organized to provide ultimate control, supervision, and enforcement of regulatory requirements," according to the draft final report. "The CCA has implemented sanitary operating procedures and a HACCP system to ensure controls of the meat inspection system. Also, the CCA has implemented a microbiological and chemical residue testing programs that are organized and administered by the national to verify its system. An analysis of each component did not identify any systemic findings representing an immediate threat to public health."
According to FSIS, the purpose of the audit was to determine whether Northern Ireland's food safety system governing meat remains equivalent to that of the United States, with the ability to export products that are safe, wholesome, unadulterated, and correctly labeled and packaged.
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