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DTN Midday Livestock Comments          03/26 12:06

   Mixed Price Shifts Leave Markets Unsettled

   Limited direction is seen Tuesday morning with prices shifting higher and 
lower in a narrow to moderate range. The potential to keep prices hovering in 
current trading ranges have limited overall buyer interest.

By Rick Kment
DTN Analyst

General Comments

   Mixed trade has developed across livestock trade with April lean hog trade 
pushing $1 per cwt higher in limited activity. The hope and expectation that 
any trade deal with China would spark aggressive buyer support is helping to 
limit pressure in the complex. Corn futures are higher in sluggish trade. May 
corn futures are 1 3/4 cent lower. Stock markets are higher in light trade. Dow 
Jones is 86 points higher with Nasdaq up 42 points. 

   LIVE CATTLE:

   Follow-through pressure quickly moved through the entire complex with nearby 
contracts steady to 20 cents lower with more aggressive pressure developing 
through fall contract months. The concern that the recent announcement of 
increased cattle on feed will not only skew the overall supply level of beef 
through the rest of the year. But the growing concern is if this trend of 
larger placements will continue through the rest of the year, and further erode 
overall buyer activity through the complex. Cash markets are undeveloped with 
bids and asking prices still unavailable. This is not surprising, as bids are 
not likely to be seen until late in the day or potentially Wednesday. Most 
trade will likely be pushed off to the second half of the week, and potentially 
Friday. Boxed Beef cut-outs at midday are higher, $0.54 higher (select) and up 
$0.69 per cwt (choice) with light movement of 64 total loads reported (41 loads 
of choice cuts, 9 loads of select cuts, 5 loads of trimmings, 9 loads of ground 
beef).

   FEEDER CATTLE:

   Mixed feeder cattle trade has developed with the complex a mixture of nearby 
verses deferred trade direction through the morning. This is holding March and 
April prices 15 to 67 cents per cwt higher, while all other trade is under 
pressure, falling 50 cents per cwt based on pressure in live cattle trade. The 
underlying pressure seen Monday has slowed significantly as traders try to 
establish more stable market shifts due to emotions being held in check. This 
could add some additional moderate swings through the near future, although 
traders seem to look back to fundamental support through the end of the month 
before aggressively moving back to the complex.

   LEAN HOGS: 

   Strong underlying support moved back into the lean hog complex with April 
futures sparking renewed gains with a $1 per cwt developing following a morning 
filled with narrowly mixed price shifts. This may continue to spark some 
underlying gains based on the expectation that domestic and export demand will 
continue to solidify through the next several of months. But there is little if 
any official indication that continued sales to China will keep stimulating the 
market. But for the most part, there seems to be a strong expectation from all 
parties that this demand growth to China will help to solidify buyer activity. 
Cash prices are unreported at this time on the National Direct morning cash hog 
report. Cash prices are unreported at this time on the Iowa/Minnesota Direct 
morning cash hog report. Pork values continue to firm as steady to active 
buying is moving through the complex. Pork cutouts gained $1.10 per cwt at 
$81.30 per cwt with 243 loads traded. Lean hog index for 3/22 is $64.97, up 
$2.56, with a projected two-day index is $67.13, up $2.16.

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


(CZ)

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