DTN Midday Livestock Comments          03/31 11:10

   Livestock Futures Higher After Bullish Cash Trade, Neutral Hog Report

   Active futures contracts of live cattle, feeders and lean hogs are all 
higher at midmorning Friday, finding support after an eruption of higher cash 
cattle trade Thursday and a neutral Hogs and Pigs report.

Todd Hultman
DTN Lead Analyst

GENERAL COMMENTS:

   June cattle and May feeders continue to trade higher this week, encouraged 
by higher cash trade Thursday and a lack of distraction from outside markets. 
June lean hogs started lower but are modestly higher at midmorning as traders 
digest Thursday's afternoon's Hogs and Pigs report.

LIVE CATTLE:

   Live cattle futures are higher at midmorning Friday with the June contract 
up 75 cents at $161.75, approaching its contract high at $161.90.

   Light to moderate cash trade took place Thursday in producers' favor. Live 
trade in the South was mostly around $167, up $4 on the week, while live trade 
in the North was reported from $168 to $172, up $3 to $7 from last week's 
weighted averages. Northern dressed trade was mostly $270 to $272, up $5 to $6 
from last week. We'll keep watching for any remaining reports Friday, but the 
week's business could be done.

   A winter storm is developing in South Dakota Friday morning, expected to 
work eastward to Wisconsin later in the day. Much of the Midwest and southern 
Midwest is at risk of severe weather Friday with high winds expected. 
Meanwhile, red flag warnings are posted throughout the southwestern Plains as 
conditions remain hostile to livestock and vegetation.

   Also helping this week's higher cattle prices, traders' worries about the 
banking sector has calmed down and boxed beef prices haven't changed much from 
last Friday, a good sign of retail demand. Boxed beef prices were higher early 
Friday with choice up $2.45 at $281.65 and selects up $1.38 at $269.84, based 
on a movement of 70 loads. Slaughter has stayed active this week, but on 
Friday, Dow Jones is estimating only 115,000 head, down from 117,000 last week. 
Saturday's slaughter is estimated at 15,000, 1,000 less than last week.  

FEEDER CATTLE:

   At midmorning Friday, May feeder cattle are up $1.35 at $205.80, approaching 
the contract high at $207.02 after seeing Thursday's higher cash prices for 
live cattle. These are also near the highest spot prices for feeder cattle 
since 2015. Helped earlier this week by an easing of concerns about the 
economy, feeder cattle prices shot higher, knowing that as long as demand for 
U.S. beef remains active, cattle and feeder cattle prices are almost certain to 
keep going higher, given the limited number of cattle available. At some point, 
high prices will slow that demand, but we don't see many signs of that yet.

   Friday's winter storm appears to be starting in western South Dakota and 
will move eastward as the day goes on. Another winter storm is expected to take 
a similar track next week. If there is good news from this, it is that chances 
are looking better for green pastures in the northwestern states this spring. 
The southwestern Plains, unfortunately, have not had the moisture and are 
expected to remain in drought early in 2023. Technically speaking, the trend in 
May feeder cattle continues to point up, supported by a need for more feeders 
in the months ahead. The latest CME Feeder Index was up $1.08 at $192.35 for 
Wednesday, March 29.

LEAN HOGS:

   At midmorning Friday, June hog futures are trading up 40 cents at $92.00, a 
neutral response to Thursday afternoon's Hogs and Pigs report. The report was 
neutral on the surface, but a little bearish for cash prices and April futures 
and a little supportive for back months. The all hogs and pigs inventory for 
March 1 was as expected at 72.86 million head. Adding bearish pressure to cash 
prices, USDA revised the Dec. 1 inventory up 1.28 million head and said 
available hogs weighing 180 pounds or more were up 2% from a year ago. On the 
supportive side for back months, March-May farrowing intentions were down 1% 
from a year ago and a little less than expected. June-August farrowing 
intentions were down 3% from a year ago. April hogs are trading down 85 cents 
at 75.60.

   With the report now in the rearview mirror, it is back to business with Dow 
Jones estimating Friday's slaughter at 480,000, up from 479,000 last week. 
Saturday's slaughter is expected at 97,000, up from 64,000 last Saturday. 
Carcass value has been under pressure this week and was reported at $73.15 
Friday morning. Cash hog prices in Friday morning's Daily Direct Hog report 
also remain under pressure this week with national negotiated trades averaging 
76.04 cents per pound and the swine formula base averaging 73.88. The CME's 
latest lean hog index was was projected down 23 cents at $75.77 on March 29, 
2023.

   Todd Hultman can be reached at todd.hultman@dtn.com

   Follow Todd Hultman on Twitter @ToddHultman1

    




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