Tuesday Morning Livestock Market Update - Futures Find Little Direction

GENERAL COMMENTS:

Live cattle exhibited a second day of weakness Monday due to the uncertainty of the impact on demand once sweeping tariffs are implemented. There may be a limited impact on beef demand overall, but a decrease in exports would leave more beef available for domestic consumption and reduce beef prices somewhat. Canada and Mexico have begun discussions to revisit the USMCA agreement, with initial talks positive. Traders saw that the corn supply for the coming year should be plentiful. The Prospective Plantings report showed 95.326 million acres are estimated to be planted. Cattle were sold at steady to $1.00 lower last week in most cases, with a regional packer paying $10.00 higher for some cattle. The packer was short-bought and needed cattle. However, most business was done at steady to lower prices. This may have set the stage for this week, as feedlots may need to move cattle that they have been holding in hopes of higher prices. Boxed beef remains strong with choice up $2.44 and select up $1.33 on Monday.

Hog futures showed a large divergence with the April contract Monday, closing $1.02 higher, while later contracts closed lower. The April contract will expire on April 14 and is adjusting to the underlying cash. Hog traders are uncertain over the impact of the sweeping tariffs on international pork demand. The National Daily Direct Afternoon Hog report showed cash up $0.19. It is unusual for packers to bid higher for hogs on Monday. This may result in further cash gains Tuesday as they want to gain ownership early. Pork cutouts gained $0.89 with cutout values at $97.45.

	BULL SIDE		BEAR SIDE
1)	The implementation of sweeping tariffs leaves traders uncertain about international demand. However, it may have a limited impact on beef prices due to continued tight supplies.	1)	Cattle futures have not returned to contract highs after last week's bullish report. Price resistance may have been reached, leaving the market vulnerable to further selling pressure.
2)	Boxed beef prices remain strong and April is the beginning of the grilling season. This should support beef demand.	2)	Beef export sales were lower last week and sweeping tariffs could further impact international demand.
3)	Packers paying higher cash for hogs on Monday is a good sign that they may be short-bought and will pay more Tuesday as they procure sufficient hogs for slaughter.	3)	Hog futures are slowly trending lower with limited fundamental news supporting the market.
4)	The Easter season is coming and pork demand is higher during that time. Packers are preparing for increased demand.	4)	Traders would prefer to sell price rallies rather than buy the breaks. This continues to build strong technical resistance.