DTN Midday Livestock Comments 03/21 11:30
Cattle Aim to Close Higher Tuesday
Thus far, both the live cattle and feeder cattle contracts have traded
higher throughout most of Tuesday's market, indicating that traders could be
willing to focus more so on the market's fundamentals.
DTN Livestock Analyst
It's an exciting morning for the cattle complex as traders seem willing to
break away from the trend that has sent both the live cattle and feeder cattle
markets lower over the majority of last two weeks. If the contracts can pull
off a higher close, a stronger morale will likely be noted throughout the
market, and feedlots could opt to price cattle higher this week. May corn is
down 2 1/4 cents per bushel and May soybean meal is up $1.00. The Dow Jones
Industrial Average is up 168.43 points.
Will the cattle complex pull off a higher close Tuesday? That's the market's
focus heading into Tuesday's afternoon as the vast majority of the live cattle
contracts are currently trading higher. April live cattle are up $0.52 at
$162.55, June live cattle are up $0.72 at $156.25 and August live cattle are up
$0.40 at $156.15. It's not so much that a higher close would mean anything
technical at this point, as the market is trading well below its 100-day moving
average, but more so it would indicate that traders are choosing to look at
more than the fear-mongering news about the U.S. banking system. Additionally,
if Tuesday's contracts are able to close higher, feedlots could feel supported
and opt to price their showlists higher. No early asking prices are noted at
this time but will likely be available on Wednesday.
Boxed beef prices are lower: choice down $0.25 ($280.77) and select down
$0.81 ($273.13) with a movement of 71 loads (45.49 loads of choice, 5.02 loads
of select, 11.25 loads of trim and 8.74 loads of ground beef).
The feeder cattle complex has been leery about trading higher, but now that
the nearby live cattle contracts are attempting to trade higher, the market is
leaning on its strong fundamentals and the limited support stemming from the
live cattle complex to trade slightly higher. April feeders are down $0.15 at
$194.47, May feeders are up $0.25 at $199.40 and August feeders are up $0.55 at
$215.25. If the corn complex gains much more strength, feeders will likely bow
lower to its pressure, but at this point, feeders are trying to change the tone
of the feeder cattle complex and trade higher through Tuesday's market.
It's another day of lower trading for the lean hog complex as the market
continues to yearn for better demand. It was encouraging to see that pork
cutout values close higher Monday afternoon, but in a bearish market like this,
that unfortunately doesn't seem to matter much. If traders weren't bogged down
with fears about the U.S. banking system, then the higher close in pork cutout
values would likely entice traders to mildly support the contracts on the
following day. But in an environment like this, there's little hogs can do to
win. April lean hogs are down $0.37 at $77.40, June lean hogs are down $0.80 at
$91.07 and July lean hogs are down $0.95 at $93.22.
The projected lean hog index is not available at this time. Hog prices are
unavailable on the Daily Direct Morning Hog Report. However, we can see that
2,576 head have traded and the market's five-day rolling average sits at
$77.95. Pork cutouts total 199.65 loads with 181.28 loads of pork cuts and
18.37 loads of trim. Pork cutout values: up $1.30, $82.94.
ShayLe Stewart can be reached email@example.com
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