Thursday Morning Livestock Market Update - Uncertainty Over Ukraine Invasion

GENERAL COMMENTS:

Cattle futures seem to have run out of steam and are heading lower. Futures broke below technical support and closed near the lows. This may trigger further selling despite higher cash trade developing late Wednesday. Some trade developed in parts of the North $1.00 higher than last week at $227 dressed on a weighted average basis Nebraska. Live business took place at $144, roughly $2 higher than last week's weighted average basis Nebraska. This should provide support except for the events overnight with Russia invading Ukraine. Corn futures are limit up overnight which may put considerable pressure on the market despite higher cash. Boxed beef fell again with choice down $0.76 and select down $4.68.

Hogs turned quickly after again making new contract highs. Selling erupted triggering further liquidation as traders tried to exit the market and preserve any profit they had. Traders will be torn between the National Direct Afternoon price up $5.77 along with cutouts up $0.36 and the discovery of the highly pathogenic avian flu discovered in Delaware, the invasion of Russia into the Ukraine and the potential for further weakness as traders liquidate long positions. Weekly export sales will not be released until Friday. Saturday slaughter is estimated at 120,000 head.

	BULL SIDE		BEAR SIDE
1)	Late trade developed in live cattle $1.00 to $2.00 higher mainly in the North. Trading is expected to be more active today as packers need cattle.	1)	Corn prices are locked limit up overnight and could put substantial pressure on cattle futures furthering the weakness that has already developed this week.
2)	Traders may step back in to buy futures more aggressively due to stronger cash after the recent weakness. Investor money may also flow in as the stock market declines.	2)	Price support in boxed beef remains elusive. Packers may pull back on bids due to declining profits as well as the idea that feedlots may increase their desire to sell.
3)	The uptrend remains intact in hog futures despite the sell off Wednesday. Traders may take advantage of the break to increase their long positions due to tightening hog supply.	3)	Hog futures may see follow-through liquidation after selling was triggered yesterday. Fund liquidation generally runs two to three days.
4)	Strong cash and higher cutouts should continue to support the market as packers are aggressively purchasing hogs to fill slaughter capacity and demand.	4)	The strong increase of grain prices due to Russia invading Ukraine may have a negative impact on futures.