GENERAL COMMENTS: Lean hog futures closed the limit $3 per cwt lower Thursday, which will trigger expanded trading limits Friday. The volatile moves in the hog market over the last two weeks could spark wide price shifts. Cash cattle markets were generally undeveloped Thursday following Wednesday's light-to-moderate trade in all areas. The overall numbers sold appear to be light, with some additional movement likely Friday. Bids Thursday were in a similar range as Wednesday, unable to gain additional traction as feeders seem comfortable holding out on unsold cattle until bids improve or will hold cattle over until early April. The National Daily Direct afternoon hog report was $0.37 higher ($66-$78, weighted average $75.36) on 7,687 head sold. Corn futures were higher in light activity with May up 1/4 cent per bushel. The Dow Jones Index was 98 points higher with the Nasdaq up 25 points.
LIVE CATTLE: Live cattle futures saw only narrow moves Thursday as stability developed in late-day trade. Futures closed mixed, $0.20 lower to $0.27 higher. Limited movement was seen the entire session. Nearby contracts inched higher on firmness in feeder cattle, while the lack of trade activity allowed narrow erosion in summer and winter contracts. Traders' focus has moved back to the limit losses in the lean hog complex. At this point, it is uncertain if live cattle will be able to attract traders fleeing the hog markets since the live cattle trade has also seen losses this week. Markets could remain sluggish through the end of the month as traders wait until early April before moving back into the complex. Beef cut-outs: lower, down $1.01 (select, $219.52) to down $1.55 (choice, $227.44) with moderate demand and light offerings of 87 loads (62 loads of choice cuts, 14 loads of select cuts, 5 load of trimmings, 6 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL: Steady. Limited bids are expected to develop Friday. The overall movement of cattle Wednesday is lighter than what one would expect for the week, creating the potential for additional trade Friday. Prices are likely to be steady with Wednesday's levels, remaining generally $2 to $3 per cwt lower than week-ago prices.
FEEDER CATTLE: Light buying interest trickled into feeder cattle trade following initial pressure. Futures closed $0.15 lower to $0.52 higher. The volatility in hog trade seemed to create a calming effect on the cattle market, as traders seemed to move into the feeder cattle complex. The lightly traded March futures contract slipped lower, while other contracts saw light-to-moderate gains. The limited trade activity added more uncertainty to the complex. CME cash feeder index for 3/27 is $142.35, up $0.20.
LEAN HOGS: Lean hog futures saw triple-digit losses of $2.15 to $3 on fears of export weakness. The focus Thursday was on the weekly export sales report. Following two weeks of sales reported to China, traders and most market watchers seemed to be anticipating this was the new normal. But, instead, not only were no sales reported, but a cancelation to China seemed to leave the market on edge. On top of that, the emotional buying that caused contracts to surge to new highs seems to have run out of steam over the last couple of days. USDA's March 1 Quarterly Hogs and Pigs report released Thursday afternoon showed a 2% increase in total inventory from a year ago. Numbers kept for breeding and marketing were also each up 2% from a year ago. Pork cutout values weakened following unsettled moves in futures trade and concerns of widespread pressure. Pork cutout values fell $0.42 per cwt, moving to $81.21 per cwt on 271 loads. CME cash lean index for 3/26 is $69.50, up $2.37. DTN Projected lean index for 3/27: $71.72, up $2.22.
FRIDAY'S CASH HOG CALL: Steady to $1 higher. End-of-the-week price support is slipping following strong futures price pressure and uncertainty about demand. Most bids are expected steady to 50 cents higher. Friday slaughter is expected at 469,000 head. Saturday runs are expected at 146,000 head.
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