GENERAL COMMENTS:
Buyer support steadily moved into cattle markets Tuesday, leading to firm gains in live cattle and feeder cattle futures. Lean hog trade was mixed with moderate pressure in nearby contracts offset by triple-digit gains in deferred contracts. Cash cattle activity remained quiet with bids still undeveloped and likely to remain that way until Wednesday or later. A few asking prices have started to trickle in with live cattle priced at $130 per cwt, while $208 seems to be the desired dressed prices. Although most trade is expected to be pushed to Thursday or Friday, trade on Wednesdays has become common over the last few weeks, and could spark some interest. The National Daily Direct afternoon hog report was $0.73 higher ($70-$79.25, weighted average $77.30) on 8,521 head sold. Corn futures were lower in light trade with May down 3 3/4 cents per bushel. The Dow Jones Index was 48 points higher with the Nasdaq up 16 points.
LIVE CATTLE: Late-day buying pushed live cattle futures $0.20 to $1.00 higher. June and August contracts set the tone throughout the day with gains at or near $1 per cwt most of the trading session. Although there has been little change in fundamental or technical issues, the focus on upcoming demand and the potential for pork to be more price competitive following the recent market rallies has helped solidify commercial buying activity during early April. Limited volume is expected the rest of the week, which could allow for moderate price swings the next two sessions. Beef cut-outs: mixed, down $0.07 (select, $221.15) to up $1.07 (choice, $232.05) with good demand and moderate offerings, 156 loads (78 loads of choice cuts, 33 loads of select cuts, 22 load of trimmings, 22 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL: Steady. Although a few asking prices have surfaced, bids are still unlikely early Wednesday. Following the last few weeks of early week trade, it is possible that some deals may get done midweek, especially with Good Friday shortening the market week.
FEEDER CATTLE: Feeder cattle futures saw strong grains late Tuesday with contracts closing steady to $1.05 higher. Trade was mixed in a narrow range most of the morning, as traders seemed unwilling to commit to additional wide market shifts. But the firmness in live cattle trade, combined with grain market pressure, sparked trader interest through the end of the session. August through November futures led the complex higher with gains at or near $1 per cwt. Trade in spot-month April was sluggish, and the contract ended unchanged at closing bell. CME cash feeder index for 4/15 is $143.46, up $0.47.
LEAN HOGS: Late-day pressure eroded support in nearby lean hog contracts. Futures closed $1.17 lower to $2.07 higher. Early support in nearby lean hog futures seemed to be short lived, as strong pressure moved through spring and summer contracts in the last hour of trade. The focus seems to be on long-term buyer support, while short-term trade seems to be uncertain of current market levels given pork production and spring demand. Traders are focusing on the potential for strong China buying to support the market, but pushing futures higher over the long term seems to be a little premature. Light pressure trickled into pork values in active trade. Pork cutout values fell $0.51 per cwt, moving to $86.53 per cwt on 393 loads. CME cash lean index for 4/12 is $79.57, up $0.23. DTN Projected lean index for 4/15 $79.84, up $0.27.
WEDNESDAY'S CASH HOG CALL: Steady to $1 higher. Light buyer support is expected to trickle into the market midweek. However, with the Easter weekend approaching and plant production reduced Friday, Saturday and Monday, packers are likely to become less aggressive to gain any extra hogs. Tuesday slaughter is expected at 475,000 head. Saturday runs are estimated at 89,000 head.
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