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DTN Midday Livestock Comments 03/20 11:41
Cattle Aim to Trade Higher But Find Mixed Support
Heading into Monday afternoon, traders will continue to watch any and all
developments in the cattle markets to see if the contracts can indeed trade
higher or if the market's outside pressure is still simply too much.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
The livestock complex is again trading mixed as the cattle contracts would
like to trade higher, but the live cattle complex is trading mixed while the
feeder cattle complex charges onward. Meanwhile the lean hog complex continues
to flounder lower as support is nearly impossible to come by for the market.
May corn is down 2 1/4 cents per bushel and May soybean meal is up $0.70. The
Dow Jones Industrial Average is up 201.38 points.
LIVE CATTLE:
Initially the live cattle complex was trading fully higher as traders were
finally given the opportunity to trade last week's exciting Cattle on Feed
Report, but as the market nears the noon hour, the nearby contracts are facing
some mild pushback. April live cattle are down $0.12 at $162.20, June live
cattle are down $0.37 at $156.02 and August live cattle are down $0.15 at
$156.25. The cattle complex continues to be the rope in a tug-of-war battle
between traders' nervousness about the banking systems and the fundamental
realities of the cattle complex. As of late, the bearishness of traders' fears
has been winning the war, but the market's bright fundamentals still remain
intact.
Last week live cattle have traded for $164, and dressed cattle have traded
for $264, both of which are $1.00 lower than last week's weighted average. Last
week's negotiated cash cattle trade totaled 76,283 head. Of that 71% (54,038
head) were committed for the nearby delivery, while the remaining 29% (22,245
head) were committed for the deferred delivery.
Boxed beef prices are higher: choice up $0.19 ($283.54) and select up $1.17
($273.61) with a movement of 38 loads (28.51 loads of choice, 4.81 loads of
select, zero loads of trim and 4.64 loads of ground beef).
FEEDER CATTLE:
As traders take the time needed to sort through Friday's Cattle on Feed
Report, they can't help but trade the feeder cattle contracts higher. With
placements starkly lower than a year ago, the fundamental bullishness of the
cattle market has again been noted in Monday's market. Helping the feeder
cattle contracts trade higher too is the fact that corn prices are taking a
lower approach to the new week with the nearby corn contracts trading just
below steady at $0.01 to $0.02 lower. April feeders are up $0.45 at $195.10,
May feeders are down $0.17 at $199.77 and August feeders are down $0.02 at
$215.27, and the rest of the deferred contracts are all trading mildly higher.
LEAN HOGS:
Once again, the lean hog complex is under attack as traders drive the nearby
contracts anywhere from $0.70 to $1.70 lower. The cattle complex has finally
found some footing in the market, but without any true fundamental support
helping the lean hog complex dig its way out of the bearish hole traders have
dug, lower trends continue to dominate the lean hog complex. There has been
chatter about African swine fever worsening again in China, which could bode
well for the U.S. hog market, but the markets have yet to see any support from
that. April lean hogs are down $1.72 at $78.15, June lean hogs are down $1.02
at $92.30 and July lean hogs are down $0.95 at $94.67.
The projected CME Lean Hog Index for 3/17/2023 is down $0.46 at $79.55, and
the actual index for 3/16/2023 is up $0.06 at $80.01. Hog prices are lower on
the Daily Direct Morning Hog Report, down $1.37 with a weighted average of
$76.44, ranging from $76.00 to $79.00 on 4,510 head and a five-day rolling
average of $77.25. Pork cutouts total 180.88 loads with 165.80 loads of pork
cuts and 15.09 loads of trim. Pork cutout values: up $1.30, $82.25.
ShayLe Stewart can be reached shayle.stewart@dtn.com
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