GENERAL
COMMENTS: Lean hog futures were down triple digits Friday as traders
adjusted markets at the end of the month and quarter. Wide price swings
during March have created volatile markets. Cattle futures shifted
moderately lower late Friday. From Friday to Friday, livestock futures
scored the following changes: Apr LC off $4.02; Jun LC off $4.50; Apr FC
off $3.55; May FC off $5.28; Apr LH off $0.95; May LH off $5.70. Cash
cattle trade appears to be essentially done for the week, although there
are rumors of limited trade developing in western Nebraska at $126.50
per cwt. The majority of needed trade developed Wednesday at $125 to
$128 live and $204 to $206 dressed. Prices are generally $1 to $3 per
cwt lower than last week. The National Daily Direct afternoon hog report
was $0.48 lower ($68- $77.50, weighted average $74.89) on 5,992 head
sold. Corn futures were lower in active trade following the USDA report
with May down 17 cents per bushel. The Dow Jones Index was 151 points
higher with the Nasdaq up 48 points.
LIVE CATTLE: Live cattle futures broke out of
the narrowly mixed trade range seen the last couple of days to close
$0.30 to $0.82 lower. End-of-the-month position-squaring pressured the
market with April and August futures leading the market lower. Traders
continue to back away from the strong rally seen over the last three
weeks. The April futures contract broke through its support level, which
could result in additional liquidation early next week. The focus on
fundamental and technical weakness over the last week is expected to
spark limited interest during early April. Beef cut-outs: lower, down
$0.63 (select, $218.89) to down $1.40 (choice, $226.04) with moderate
demand and light offerings, 92 loads (51 loads of choice cuts, 24 loads
of select cuts, 8 load of trimmings, 9 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL: Steady. The early
week trade this week is not expected to change the direction or activity
levels Monday. Showlist distribution and inventory-taking are likely to
be the main activities Monday with trade likely to develop later in the
week, even though packers remain short bought.
FEEDER CATTLE: Feeder cattle futures settled
mixed ($0.90 lower to $0.85 higher) in choppy trade Friday. Despite the
back-and-forth trade seen early in the session, traders seemed to
totally ignore sharp losses in the grain market Friday, which typically
spark interest in feeder cattle. The concern that follow-through
pressure may develop in early April with prices at or near short-term
support levels kept most buyers out of the market Friday. CME cash
feeder index for 3/28 is $141.74, down $0.61.
LEAN HOGS: Lean hog futures ended March like a
lion with sharp losses of $1.50 to $4.02 Friday. The June contract has
tumbled $6.25 per cwt over the last two trading sessions as traders
backed away from the rally seen over the last couple of weeks. Even
though the USDA Hogs and Pigs report was viewed as slightly bearish with
a 2% increase in inventory from last year, the main concern is that
export sales may not be as aggressive as previously thought, following
an export sales report this week that showed no new sales and a
cancelation. This could usher in a period of volatility in hog markets
depending on weekly export numbers to China. Pork cutout values
stabilized Friday despite wide market shifts in primals, moving from
$1.96 lower to $2.53 higher. Pork cutout values added $0.12 per cwt,
moving to $81.33 per cwt on 243 loads. CME cash lean index for 3/27 is
$71.72, up $2.22. DTN Projected lean index for 3/28 $73.87, up $2.15.
MONDAY'S CASH HOG CALL: Steady to $1 higher.
Despite the pressure in the futures trade, packers continue to
aggressively source market-ready hogs. This will continue early next
week with most bids expected 50 cents higher. Monday slaughter is
expected at 477,000 head.
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