GENERAL COMMENTS: Weighted averages for live cattle were steady last week, with the exception of Iowa, where prices on a live basis moved $0.40 lower from $128.90 to $128.50. The 5-state weekly average landed at $128.15. According to the closing report, the national hog base is $1.21 higher ($41-$47, weighted average $45.86). Corn futures settled 2 1/4 cents lower, extending the downward trend of recent weeks and plumbing fresh contract lows. The stock market bounced somewhat Monday, up 37 points (over 1%) in the S&P 500.
LIVE CATTLE: Friday afternoon's USDA Cattle on Feed report, showing the current number of animals in feedlots barely above the year-ago number, held no drastic implications for the live cattle futures market. A hefty volume of futures trade was noted Monday, but the actual price movement was minimal and the April contract posted an inside day below $130. Beef cut-outs: steady, up $0.09 (choice, $226.13) to $0.24 (select, $218.75) with light-to-moderate demand and offerings (95 total loads of cuts, trimmings, and grinds).
TUESDAY'S CASH CATTLE CALL: Steady. Tuesday's activity will typically involve the collection and review of this week's showlists. Packers won't feel urgency to meet the higher asking prices ($207 dressed/$130 live) after seeing last week's supply numbers.
FEEDER CATTLE: Feeder cattle futures moved lower by as much as $1.725 in the April contract Monday, in recognition that this winter's weather problems still aren't over. Logistical challenges (and seasonal availability of calves) have limited the physical movement and offerings of feeder cattle, confirmed by Friday's Cattle on Feed report, which showed placements at 95% of year-ago levels. So there may be eagerness to re-stock feedlots next month or whenever all this snow melts, but for now, the market isn't attempting a sudden bullish recovery. CME cash feeder index for 03/08: $139.28, off $0.75.
LEAN HOGS: Cold storage supplies and physical values for pork products have, in recent days, supported the lean hog futures market's upward recovery off its February lows. The movement is therefore justified by fundamentals, but the volatile nature of the daily gains (as much as $2.300 in the April contract on Monday) suggests there may be some volume of frantic speculative short-covering taking place. Carcass values have continued moving higher, with bellies and hams still leading the way (bellies up $3.35 to $118.46, and hams up $2.25 to $49.07). Pork cut-out: $65.04, up $0.79.CME cash lean index for 03/07: $51.71, down $0.04.
TUESDAY'S CASH HOG CALL: Steady. Hog buyers are expected to persist with generally firm bids, but at some point, the bullishness will be all priced in.
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