Wednesday Midday Livestock Market Summary - Cattle Markets Continue Upward Climb

GENERAL COMMENTS:

Feeder cattle futures continued to move aggressively higher during Wednesday morning trade with prices $3 to $4 per cwt higher. The underlying support seen through the entire beef market and concerns overall cattle numbers will continue to be reduced rather than rebound due to drought conditions and recent fires could keep buyers bullish over an extended period. Live cattle contracts have shifted higher, but limited early month buyer interest seems to be keeping prices within current market ranges as traders seem to be unwilling to break above new contract highs, at least for now. Lean hog futures have bounced back from Tuesday's market pressure with mixed to mostly higher prices seen during morning trade. May corn is down 6 at $4.518 and May soybean meal is down $0.10 at $316.3. The Dow Jones Industrial Average is up 370.53 at 46,712.04.

LIVE CATTLE

Live cattle futures have gained additional support with $1 per cwt gains in nearby contracts based on expectations that beef prices will continue to remain strong due to tighter supplies and the upcoming summer grilling season. April contracts are holding above $244 per cwt in morning trade, although volume seems to have slowed significantly from early week. Further buyer interest seems to still be developing, especially given the firmness in outside financial markets over the past couple of days. Cash cattle markets remain undeveloped; all is quiet in feeding country at midday with bids and asking prices still not fully established. Significant trade volume will likely be delayed until Thursday and/or Friday. April live cattle are $0.93 higher at $243.95, June live cattle are $0.83 higher at $244.1, August live cattle are $0.70 higher at $240.50. 

Boxed beef prices are Lower: choice down $0.69 ($394.80) and select down $0.30 ($392.63) with a movement of 73.27 loads (58.54 loads of choice, 6.21 loads of select, zero loads of trim and 8.52 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures posted additional strong gains through the morning, up to $3 to $4 per cwt higher in nearby contracts early. Trade has slowed slightly at midday with nearby contracts losing some of the initial market momentum, but an underlying firm market rally continues to hold with traders focusing on strong technical and fundamental support still well entrenched within the market. April futures are holding above $371 per cwt, but the ability for all contracts through October to hold above $360 per cwt keeps traders focused on the potential for additional upward market support in the near future. April feeders are $2.35 higher at $371.475, May feeders are $2.43 higher at $368.9 and August feeders are $3.13 higher at $367.55.

LEAN HOGS:

Lean hog futures remain mixed Wednesday morning, although buyer support is seen in spot month April, as well as late-summer contracts. With more focus moving toward the May and June contracts following the first of April, light to moderate pressure has slowly developed in these contracts. Traders remain comfortable with the current market range, but given availability of pork and market-ready hogs, buyers are hard pressed to aggressively move back into the market in the near future. April lean hogs are $0.35 higher at $90.775, May lean hogs are $0.38 lower at $96.15 and June lean hogs are $0.23 lower at $104.825. Hog prices are lower on the Daily Direct Morning Hog report, down $0.18 with a weighted average of $90.19, ranging from $89.50 to $91.00 on 1,449 head with a five-day rolling average of $90.19. Pork cutouts totaled 130.36 loads with 114.70 loads of pork cuts and 15.66 loads of trim. Pork cutout values are down $0.95 at $96.13.

Wednesday Morning Livestock Market Update - Cattle Futures May Test Contract Highs

GENERAL COMMENTS:

Cattle futures were the recipients of strong buying interest Tuesday, resulting in the June and August contracts closing the chart gaps that had remained since Oct. 17. Tight cattle supplies may tighten further as there is evidence of increased cattle sales from some areas facing a feed shortage. After the large price decline in October and November, it was anticipated the top may have been established for the market; but here we are with the June and August closing the gaps and knocking on the door of new contract highs. The strong stock market on Tuesday likely influenced the strength. Boxed beef prices on Tuesday were higher, with choice up $1.39 and select up $1.92. More discussion is surfacing regarding the possibility of reopening the border with Mexico for cattle imports, according to the Secretary of Agriculture Brooke Rollins. There is no set date for any port to reopen, but there is a possibility of another phase in strategy, with the port in Douglas, Arizona, being the farthest from the New World screwworm cases. Further assessment is ongoing.

Hog futures could not hold the earlier strength of Tuesday and succumbed to selling pressure. With this weakness, the potential to close the chart gaps below the market may be accomplished sooner rather than later. The hope the market found a bottom and would renew the uptrend was dashed on Tuesday. Both cash and cutouts were lower, which may put further pressure on the market Wednesday. The National Daily Direct Afternoon Hog report was down $0.34. Pork cutouts fell by $1.32. It is uncertain how many hogs packers will purchase due to the holiday-shortened week, but there are sufficient supplies of market-ready hogs, reducing the need to be aggressive.

	BULL SIDE		BEAR SIDE
1)	Feeder cattle futures are poised to break through resistance and move toward regaining the losses from October and November.	1)	Traders have put a premium back into cattle futures. If cash trade is no better than steady this week, futures may retrace.
2)	The potential for the limitation of an increase in the breeding herd in some areas due to the dryness and wildfires may further tighten cattle supplies.	2)	Closing the chart gaps and contract highs may be a formidable resistance point that could increase selling activity. This could take place ahead of the three-day weekend.
3)	Hog futures may find buying interest if the chart gaps remaining from Friday are closed.	3)	The weakness of both cash and cutouts on Tuesday may put further pressure on hog futures Wednesday. Traders are unable to find consistent fundamental support.
4)	The hog slaughter pace is not slowing down and higher beef prices may benefit pork demand as consumers shop for value.	4)	The chart gaps in hog futures are likely to be closed ahead of the long weekend. Lower prices are needed to accomplish that task.

Tuesday Closing Livestock Market Update - Cattle Futures End March Higher

GENERAL COMMENTS:

Cattle futures surged higher Tuesday afternoon following aggressive end-of-the-month and end-of-the-quarter moving into both live cattle and feeder cattle contracts, as well as sharp gains in financial markets. Feeder cattle futures led the market higher with gains of more than $5 per cwt in nearby contracts, while live cattle contracts traded higher all day, but surged to $3 per cwt gains at the closing bell. The underlying support in beef market fundamentals has caught the eye of technical traders following a rebound in outside and financial markets. At this point, traders are less concerned about active gains in oil and gasoline prices, especially when it comes to the already tight beef markets. Lean hog futures closed lower as limited buying developed due to ample pork supplies available to the market, as well as ready access to market-ready hogs by packers through the end of March. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.34 with a weighted average of $90.58 on 5,584 hogs. May corn closed up 2 at $4.578 and May soybean meal closed up $1.50 at $316.4. The Dow Jones Industrial Average is up 1,125.37 at 46,341.51.

LIVE CATTLE:

Live cattle futures trade posted strong end-of-the-day buying support, moving back into all live cattle futures. Markets traded strongly higher for most of the session, although more active interest quickly and aggressively stepped into the market at the end of the day. A combination of end-of-the-month and end-of-the-quarter buying seen in cattle trade was mixed with aggressive gains in stock market trade. The Dow Jones Index traded well above 1,000 points higher at the end of March. Increased overall buyer support in most outside markets could add to technical buying, which has redeveloped in recent trading sessions. Nearby April futures are trading near February highs, but were unable to close above this level at the end of the month. Tight beef supplies continue to be the main focus, helping market fundamentals to remain strong. Cash cattle markets remain very quiet in cattle feeding country this afternoon, with bids and asking prices still not established. Significant trade volume will likely be delayed until later in the week. April live cattle closed $3.48 higher at $243.025, June live cattle closed $3.08 higher at $243.275 and August live cattle closed $2.50 higher at $239.8. Tuesday's slaughter is estimated at 108,000 head, 1,000 head more than a week ago and 14,000 head less than a year ago. 

Boxed beef prices closed higher: choice up $1.39 ($395.49) and select up $1.92 ($392.93) with a movement of 95.61 loads (68.55 loads of choice, 8.56 loads of select, 3.10 loads of trim and 15.40 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Steady to $1 Higher. Strong underlying beef market fundamentals, as well as aggressive futures gains, are adding additional end-of-the-week support to cash cattle trade.

FEEDER CATTLE:

Feeder cattle futures led the cattle market higher with gains nearing $6 per cwt at the end of the trading session Tuesday. April and May contracts posted gains above $5 per cwt on the last trading session of March, with summer contracts holding gains of $4 per cwt. The combination of fundamental support and technical buying interest in all cattle trade led to the late-month market surge. With fires through Western Nebraska and drought areas in other major cattle areas, there is a concern that significantly higher cow displacements over the upcoming months will further tighten cattle numbers and already tight beef supplies over the long term. Although prices are still below contract highs, the potential for further market support in the near future is keeping many traders bullish on strong beef and cattle prices for an extended period. April feeders closed $5.83 higher at $369.125, May feeders closed $5.15 higher at $366.475 and August feeders closed $4.83 higher at $364.425. The CME Feeder Cattle Index for March 27: up $0.81, $365.93.

LEAN HOGS:

Lean hog futures ended the last day of March under pressure as fundamental pressure developed across the entire lean hog complex. Spot April contracts posted fractional losses, although more concern developed in summer contracts as overall uncertainty about whether current or expected pork demand will be able to keep up with current supply levels of market-ready or near market-ready hogs available to the consumer market. June contracts continue to trade at a strong premium to the April contracts, although this is seasonally expected, and focuses more on technical market interest than changing pork market fundamentals. April lean hogs closed $0.05 lower at $90.425, May lean hogs closed $0.60 lower at $96.525 and June lean hogs closed $0.83 lower at $105.05. Tuesday's hog slaughter is estimated at 495,000 head, 0 head less than a week ago and 9,000 head more than a year ago. Pork Cutouts totaled 308.18 loads with 259.75 loads of pork cuts and 48.43 loads of trim. Pork cutout values are down $1.32 at $96.25. The CME Lean Hog Index for March 27: down $0.42, $90.76.

WEDNESDAY'S HOG CALL: Steady. Despite expected pork market stability heading into the month of April, cash hog prices are expected to remain steady to soft early Wednesday morning.

Tuesday Midday Livestock Market Summary - Cattle Futures Continue Higher

GENERAL COMMENTS:

Strong triple-digit gains have redeveloped in all cattle trade, with feeder cattle futures leading the shift higher and prices holding a $3-per-cwt rally through most nearby contracts at midday. Lean hog futures remain under light to moderate pressure with ample supply of hogs available for packers' needs. This is not only limiting cash hog prices but also limiting pork values heading into April. May corn is up 2 1/2 at $4.583 and May soybean meal is up $1.40 at $316.3. The Dow Jones Industrial Average is up 493.04 at 45,709.18.

LIVE CATTLE:

Live cattle futures continue to move higher with trade gaining on technical support as nearby contracts near contract highs. The ability to continue to push boxed beef prices higher as they near $400 per cwt is adding even more momentum to the live cattle complex. The combination of already tight supplies and potential cow losses due to Nebraska fires and feed shortages due to drought conditions could add more momentum to the market in the coming days and weeks. Cash cattle markets are still quiet with a very slow start to the day this Tuesday morning in cash cattle country, with bids and asking prices not established. Significant trade volume will likely be delayed until Wednesday or more likely later in the week. April live cattle are $1.60 higher at $241.15, June live cattle are $1.20 higher at $241.4 and August live cattle are $1.25 higher at $238.55. 

Boxed beef prices are Higher: choice up $2.34 ($396.44) and select up $3.78 ($394.79) with a movement of 50.25 loads (36.36 loads of choice, 6.30 loads of select, zero loads of trim and 7.59 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures surged higher, with April through August futures posting gains above $3 per cwt at midday. This continued momentum in all cattle markets is sparking additional fundamental and technical buying through the entire complex. It is expected that additional market support will be seen through the end of the day as traders look to end the month of March and first quarter on a positive note. April feeders are $3.23 higher at $366.525, May feeders are $3.18 higher at $364.5 and August feeders are $2.95 higher at $362.55.

LEAN HOGS:

Lean hog futures are the one area of livestock trade that is not posting active, aggressive gains Tuesday morning. Spot April contracts are lightly traded and holding single-digit losses, while most of the focus is on the June contracts due to overall limited open interest in the May lean hog contracts. Once April contracts expire, the majority of trade will then be focused on June contracts, which are currently trading $14 per cwt above the April market. This could help to bring about some additional cash market support, but the overall outlook in the lean hog complex remains cautious at best, given current pork demand, while supplies of market-ready or near market-ready hogs remain readily available. April lean hogs are $0.10 lower at $90.375, May lean hogs are $0.75 lower at $96.375 and June lean hogs are $0.95 lower at $104.925. Hog Prices are lower on the Daily Direct Morning Hog report, down $0.23 with a weighted average of $90.37, ranging from $88.00 to $91.00 on 3,104 head with a five-day rolling average of $90.72. Pork Cutouts totaled 185.54 loads with 155.12 loads of pork cuts and 30.42 loads of trim. Pork cutout values are down $1.55 at $97.08.