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.
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