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DTN Midday Livestock Comments          03/21 12:03

   Hog Markets Expand Gains

   Sharp triple-digit gains have flooded into hog trade. This has expanded 
contract highs in all nearby markets, allowing for further potential gains 
through the end of the session.

By Rick Kment
DTN Analyst

General Comments

   Hog trade continues to be the story of the day with prices surging to 
expanded trading limits through morning activity. This momentum in buyer 
activity is expanding contract highs based on expected further demand. Cattle 
markets are lightly traded with narrow gains holding live cattle futures steady 
to firm Thursday morning. Corn futures are higher in sluggish trade. May corn 
futures are 5 cents higher. Stock markets are higher in light trade. Dow Jones 
is 145 points higher with Nasdaq up 73 points. 


   Limited activity has kept live cattle markets stable through the morning 
with prices 10 to 30 cents per cwt higher at midday. Despite sharp triple digit 
gains in lean hog trade and strong buyer support continuing across the feeder 
cattle complex, live cattle traders remain reluctant to aggressively step back 
into the market. With April futures nearing long term resistance levels of the 
illusive $130 per cwt, traders continue to get cold feet when prices move near 
this level. It is likely that additional bullish market news will need to 
develop in order to spark active interest through nearby live cattle futures in 
the near future. Cash cattle trade still remains a long way off, with active 
trade likely to be pushed off until Friday. Given the release of the March 1 
cattle on feed report Friday afternoon, trade may be delayed until after the 
report release. A few token bids have finally developed in Nebraska at $204 per 
cwt dressed basis. This is $6 per below asking prices, and unlikely to get any 
attention at this point in the week. Asking prices remain at $130 to $132 per 
cwt live and $210 dressed. Boxed Beef cut-outs at midday are higher, $0.54 
higher (select) and up $0.18 per cwt (choice) with light movement of 53 total 
loads reported (34 loads of choice cuts, 9 loads of select cuts, no loads of 
trimmings, 11 loads of ground beef).


   Moderate to firm support is developing in feeder cattle trade Thursday with 
traders focusing on a combination of tighter supplies through the rest of the 
year as well as overall beef demand expected to improve through the summer 
months. May through October contracts are the most aggressively focused on 
feeder cattle contracts, posting $1 per cwt gains through the morning. Although 
no concrete numbers of cattle impacted from winter storms over the last two 
months, or recent flooding is available, the expectation that losses will 
affect overall supplies is creating market reactions.


   Continued market support has flooded through lean hog trade with all nearby 
contracts taking advantage of expanded trading limits through the Thursday 
session. April futures are holding a $3.12 per cwt rally, moving near $77 per 
cwt. This continues to set new contract highs for all nearby contracts. The 
underlying support in the complex continues to spark some additional underlying 
support through the entire complex with June through August setting sights on 
$100-per-cwt price levels. The speed at which prices have moved higher is 
starting to create concern, leaving the complex ripe for an aggressive market 
correction. Cash prices are higher on the National Direct morning cash hog 
report. The weighted average price added $0.64 at $61.90 per cwt with the range 
from $55.00 to $65.00, on 3,821 head reported sold. Cash prices are unreported 
due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. 
Pork values have regained market momentum with triple digit gains pushing 
carcass prices sharply higher. Pork cutouts gained $2.33 per cwt at $76.38 per 
cwt with 122 loads traded. Lean hog index for 3/19 is $59.22, up $1.68, with a 
projected two-day index is $60.75, up $1.53.

   Rick Kment can be reached at 


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