DTN Midday Livestock Comments 03/27 12:10

DTN Midday Livestock Comments          03/27 12:10

   Sharp Losses Develop in Hog Complex       

   Triple-digit losses develop in hog and feeder cattle complex early Monday 
morning. This continued pressure continues to focus on the longer-term focus of 
increased supply growth in hog numbers. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Livestock futures remain under pressure Monday, although cattle futures are 
trading better than expected given the situation surrounding the Brazilian beef 
situation. April live cattle futures are trading 60 to 70 cents per cwt lower 
at midday. Lean hog futures remain triple digits lower as continued pressure 
remains focused on building supply issues. Corn prices are lower in light 
trade. May corn futures are 2 cents lower. Stock markets are mixed in light 
trade. The Dow Jones is 40 points lower while Nasdaq is up 6 points.

   LIVE CATTLE:

   Moderate pressure is seen in live cattle futures Monday morning. April live 
cattle futures are holding losses of 60 to 70 cent losses with traders focusing 
on pressure from the Brazilian cattle market news, but still focusing on market 
stability moving forward based on the potential of longer term firming beef 
market supply tightness in the domestic market. This could help to bring about 
additional long-term market support over the near term. Cash cattle markets is 
undeveloped Monday morning. There are questions concerning just how much cash 
cattle trade needs to, or will be done this week, as packers are increasingly 
sluggish when it comes to chasing prices higher this week. Asking prices remain 
at $132 and higher in the South and $217 to $218 in the North. Trade that does 
develop may be seen around or after the release of the cattle on feed report 
Friday. Beef cut-outs at midday are lower, $0.03 lower (select) and down $1.99 
per cwt (choice) with light movement of 34 total loads reported (19 loads of 
choice cuts, 6 loads of select cuts, no loads of trimmings, 8 loads of ground 
beef). 

   FEEDER CATTLE: 

   Strong pressure has been seen in feeder cattle trade at midday as moderate 
pressure during the morning has continued to develop through the day as 
increased softness has continued to be seen in all markets. Even though more 
focus is not seen in live cattle markets through midday, the lack of support in 
boxed beef values and overall interest in the enter livestock market is 
creating a strong pullback in the feeder cattle market. Because of the sharp 
unchecked price surge in feeder cattle futures prices over the last three 
weeks, aggressive market corrections are not starting to be seen. This is 
allowing for $1.50 to $1.80 losses to develop across the complex.    

   LEAN HOGS:

   Triple-digit losses have once again swept through lean hog futures market 
Monday morning. This latest move has quickly added to the most recent pressure 
in the complex and broken through support levels of $66.75 per cwt seen in 
early March. The concern that increased supplies will be unable to limit the 
ability to keep demand from becoming burdensome over the next several weeks and 
months. This could put more pressure on prices through the spring and summer, 
limiting seasonal prices moves. Cash prices are lower on the National Direct 
morning cash hog report. The weighted average price fell $0.76 at $63.61 per 
cwt with the range from $58.00 to $64.50 on 3,038 head reported sold. Cash 
prices are lower on the Iowa Minnesota Direct morning cash hog report. The 
weighted average price fell $0.77 at $63.57 per cwt with the range from $59.00 
to $64.50 on 237 head reported sold. The National Pork Plant Report reported 
160 loads selling with prices gaining $1.40 per cwt. Lean hog index for 3/23 is 
at $70.91 down $0.38 with a projected two-day index of $70.24 down $0.67. 

   Rick Kment can be reached at rick.kment@dtn.com 


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