Friday Morning Livestock Market Summary - Meat Futures Staged to Open Late-Week Market with Firm Prices

GENERAL COMMENTS:

This is the first time in weeks that cattle trading leverage has been balanced enough to delay the development of significant trade volume until Friday. Yes, some cash business did surface in parts of Texas Thursday (i.e., $117 to $118, near steady with last week), but most showlists remain unsold thanks to a degree of feedlot confidence we haven't seen in a long time. Will that confidence bear fruit in terms of higher country sales? That question may not be answered until late Friday afternoon. To be sure, packers are short bought. On the other hand, processing margins are narrowing and the cold spring at this time does not seem too promising in terms of better beef demand. Asking prices should be renewed around $120 to $122 in the South and $190 to $192 plus in the North. Live and feeder futures should open higher, boosted by follow-through buying and cash optimism.

The cash hog trade is set to complete the most progressive week it's seen in months. Given the fact that the product trade has been no ball of fire, we can only conclude that market numbers are tightening (or packers sense that the country offering is going to be smaller in the very near future). Look for cash bids Friday to open $1 higher. Lean futures seem set to at least moderately higher, supported by residual buying interest and ongoing cash strength.

	BULL SIDE		BEAR SIDE
1)	Cattle carcass weights slid lower in the week ending March: all cattle averaged 817 pounds, 1 pounds less than the week before, and steers averaged 872 pounds, 6 pounds less than the prior week and 10 pounds more than 2017; heifers averaged 814 pounds, 1 pound below the previous week and 9 pounds heavier than last year.	1)	Beef cutouts closed no better than mixed on Thursday, continuing to reflect the lackluster start to seasonal product demand.
2)	Net beef export sales last week increased to 21,800 metric ton (MT), up 38% from the previous week and 33% from the prior four-week average.	2)	Judging by comments made by many countries who actually formed a new TPP once Trump bowed out (i.e., the so-called CPTPP), it may not be so easy for the U.S. to rejoin the party.
3)	At the same time, net pork export sales climbed to 21,800 MT, up 5% from the previous week. Actual pork exports for the week totaled 22,900 MT, up 14% from the previous week.	3)	At the same time, the President threw out promising words regarding the U.S. rejoining the TPP, he seemed to go out of his way again to bad mouth NAFTA, questioning whether a new deal was imminent or not.
4)	It sounds like President Trump has directed his top economic advisors to explore the possibility of jumping back on the TPP bandwagon (see article below).	4)	The long winter and long-delayed spring continues to be the dominant script with yet another major snow storm expected to blow through much of the central Plains this weekend.

OTHER MARKET SENSITIVE NEWS

CATTLE: (morningstar.com) -- One year after withdrawing the U.S. from the Trans-Pacific Partnership, President Donald Trump has asked his top economic advisers to study the possibility of re-entering the trade pact negotiations.

Mr. Trump has deputized Robert Lighthizer, the U.S. trade representative, and Larry Kudlow, the director of the National Economic Council, to study the possibility of re-entering the TPP if the terms were favorable, the president told a group of lawmakers on Thursday.

The president's new openness toward the TPP, which he had said during his campaign was a deal "pushed by special interests who want to rape our country," comes as he is facing criticism from farmers for his escalating trade battle with China. After Mr. Trump took aim at China with new steel and aluminum tariffs, Beijing responded by announcing it would place penalties on a list of agricultural products that would affect swaths of the president's political base.

Mr. Trump was meeting with lawmakers from states that rely on agriculture when he made the comments about the TPP. Sen. Ben Sasse, a Nebraska Republican who was in the meeting, said he believed Mr. Trump was serious about his interest in re-entering the trade pact.

"That's really good news for America," Mr. Sasse said.

Everett Eissenstat, deputy director of the National Economic Council, said in London on Thursday that the U.S. would consider rejoining the TPP if it could agree on more desirable terms.

"It's something that's of interest," Mr. Eissenstat said at The Wall Street Journal's CEO Council in London.

"We're engaged in a number of dialogues. Will that eventually culminate in something like TPP? We'll have to see. There's a lot of work to be done," Mr. Eissenstat said.

HOGS: (Dow Jones) -- Chinese pork imports will likely decrease by 7% in 2018 to 1.5 million tons as domestic pork supplies increase and prices continue their downward trend further narrowing the gap between domestic and imported products, the USDA says. 

Last week China put a new tariff on imports of US pork but imports from other countries were unaffected. The USDA notes that Chinese consumers prefer fresh pork and that most imported products are used by processing facilities churning out ham and sausages, a factor that will weigh on future demand.