Thursday Morning Livestock Market Update - Quarterly Hogs & Pigs Report Later Today

GENERAL COMMENTS:

Live cattle futures posted nice gains Wednesday, continuing to retrace the losses from the first half of March. You could say March came in like a bear and maybe out like a bull. Front-month April has nearly moved back to its previous high. Optimism is developing for higher cash trade as some feedlot offers have been hiked $1.00 in anticipation the stronger market may cause packers to bid up for cattle. Boxed beef has been higher early in the week but showed weakness Wednesday with choice down $0.34 and select down $1.46. Feeder cattle futures have been increasing despite corn prices. Demand for feeder cattle remains strong, supporting futures. Thursday is the final day to trade the March contract.

Hogs were lower right from the start and weakened further shortly thereafter. Two days of lower cutouts did not provide any fundamental support to the market. Cutouts were able to move higher Wednesday, gaining $0.26 with bellies up $7.85. The National Direct Afternoon Hog report showed a decline of $0.13. Trading activity Thursday might be mixed as the focus will be on the Hogs & Pigs report to be released after the close. The average trade estimate for all hogs and pigs on March 1 is 100.3% of last year. Kept for breeding at 100.6% and kept for marketing at 100.3%. Traders will react according to where the actual falls relative to the estimates. Saturday slaughter is estimated to be 98,000 head.

	BULL SIDE		BEAR SIDE
1)	Cattle futures continue to regain the losses of the first half of March with contracts likely to retest the highs due to continued supply tightness.	1)	Recent weekly beef export sales have not been very strong, and another low number Thursday could temper upside futures potential.
2)	Some feedlots raised their offers by $1.00 Wednesday in response to the strength in futures.	2)	Boxed beef showed weakness in both categories Wednesday, which could put some pressure on trading Thursday.
3)	Hog futures remain extremely oversold moving into the Quarterly Hogs & Pigs report. There could be some short-covering Thursday.	3)	Hog weights increased 0.9 pounds last week to an average of 287.7 pounds. This is only 0.2 pounds below a year ago.
4)	Another good weekly export sales report for pork could provide some support under the market.	4)	The Hogs & Pigs report is expected to show hog numbers close to year-earlier levels, indicating plentiful supplies.