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DTN Midday Livestock Comments          03/23 12:01

   Cattle Futures Pull Back From Previous Gains     

   Strong triple-digit losses have quickly developed in lean hog trade Thursday 
morning. The concern that additional pressure will develop in pork values and 
cash markets could lead to further losses late in the week. 

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Moderate to strong pressure is seen through the entire livestock market as 
cattle traders try to adjust positions following the strong growth seen over 
the last couple of weeks. Hog markets on the other hand are focusing more on 
fundamental pressure with most contracts holding triple-digit losses at midday. 
Corn prices are lower in light trade. May corn futures are 1 cent lower. Stock 
markets are higher in light trade. The Dow Jones is 80 points higher while 
Nasdaq is up 15 points.

   LIVE CATTLE:

   Live cattle futures have quickly pulled back from the trend of posting 
triple-digit gains. Even though markets are lower, the firmer market trend 
still is holding as traders appear to be taking positions. This has limited 
selling to 50 to 70 cents per cwt through most of the morning as current market 
prices are likely to hold through the end of the session. Cash cattle activity 
remains sluggish early Thursday morning with bids of $212 to $215 redeveloping 
in the North. So far, trade is undeveloped with feedlot managers holding firm 
to asking prices. This could push trade into the day Friday. Asking prices 
remain at $132 and higher in the South and $217 to $218 in the North even with 
the moderate pullback in futures trade. Beef cut-outs at midday are mixed, 
$0.75 higher (select) and down $1.00 per cwt (choice) with active movement of 
103 total loads reported (54 loads of choice cuts, 29 loads of select cuts, 4 
loads of trimmings, 15 loads of ground beef). 

   FEEDER CATTLE: 

   Moderate pressure has quickly developed through feeder cattle futures 
Thursday morning. The pullback in trader activity is more focused on the 
desired need for a market correction following the rocket-like trend the feeder 
cattle chart has taken over the last two weeks than any change in market 
fundamentals. March futures remain lightly trade and holds a narrow loss, while 
the rest of the complex is trading 20 to 80 cents lower.   

   LEAN HOGS:

   Nearby lean hog futures appear to be testing support levels following the 
latest round of market pressure seen Thursday morning. May through April 2018 
contracts are holding triple-digit losses with traders focusing on recent 
pressure in cash markets while pork values continue to erode. The aggressive 
availability of pork on the market may continue to limit overall market support 
in all areas of the complex, and could lead to further market pressure. April 
contracts remain lightly traded with losses contained to 25 cents per cwt. But 
June futures are posting a $1.47 per cwt loss, trading at $74.27 per cwt. This 
has broken through the December 2016 low, and could spark additional losses if 
markets close at this level. Cash prices are unavailable on the National Direct 
morning cash hog report. Cash prices are unavailable on the Iowa Minnesota 
Direct morning cash hog report. The National Pork Plant Report reported 184 
loads selling with prices falling $1.21 per cwt. Lean hog index for 3/21 is at 
$71.41 down $0.07 with a projected two-day index of $71.29 down $0.12. 

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


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