Tuesday Morning Livestock Market Summary - Cattle Trade Looking for Support

GENERAL COMMENTS:

Cash cattle trade activity is expected to remain sluggish through most of the week with bids and asking prices undeveloped Monday. Showlists are generally larger with Texas the only region posting lighter offerings for the week. Bids and asking prices may not develop until late Tuesday or Wednesday, with trade likely to be pushed off to the end of the week. Strong price pressure ratcheted markets back from the top edge of the trading range following increased cattle on feed numbers. Although the increase in placements and overall on feed numbers is not likely enough to push prices lower in itself, the uneasiness through the entire livestock complex added to the overall market pressure. Early trade is expected to remain under pressure, although nearby contracts are expected to still hold short-term support levels, allowing markets to hover in the currently wide sideways pattern in the next couple of weeks.

Strong pressure developed through the lean hog complex with traders pulling away from contracts highs. The volatility in Friday's market lead to additional underlying pressure through the entire complex. Deferred lean hog futures were impacted by the lack of follow-through support in the complex, allowing for increased overall weakness and triple-digit losses. April futures have held onto moderate gains, with a 32-cent price bounce in late-day trade. This allowed for increased overall stability in spot trade, while the rest of the complex remains under light pressure, but still sustaining a generally bullish market direction. Cash hog values are expected to redevelop steady to $2 per cwt higher with most bids $1 per cwt higher Monday morning. Expected slaughter Tuesday is at 477,000 head.

	BULL SIDE		BEAR SIDE
1)	Summer and winter live cattle trade still remains well above 40- and 100-day moving averages, despite the strong triple-digit pullback in price levels. This continues to spark underlying buyer activity in the complex.	1)	Live cattle futures have turned lower, breaking the two-week market surge in the complex. This could add follow-through pressure in the complex.
2)	Seasonal beef demand is expected to pick up through the spring and summer, with increased temperatures and outdoor grilling activity making up for lost time over the cold winter and spring.	2)	Beef values continue to add uncertainty to the complex with narrowly mixed trade developing across the entire complex. This could limit follow-through support through the near future.
3)	Aggressive buyer support continues to flood into cash hog trade. This continues to spark increased underlying support in the entire complex, maintaining buyer interest in futures trade.	3)	Strong pressure in deferred lean hog trade has added to the lack of support in the hog complex. This has the potential to pull prices lower in the near future, limiting underlying buyer support in the entire complex.
4)	Pork values have continued to surge higher with increased overall buyer interest in the entire complex. Expected strong demand growth is sparking widespread primal market price support.	4)	Little details concerning overall export market support the last couple of weeks is adding increased overall pressure to the entire complex.

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