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DTN Midday Livestock Comments          03/27 11:57

   Feeder Cattle Prices Surge Higher                

   Strong late-week gains have quickly developed through the feeder cattle 
complex Friday morning. Current gains are holding prices over $2 per cwt 
higher, which has sparked additional spill-over buying interest to develop in 
live cattle futures. 

By Rick Kment
DTN Analyst



GENERAL COMMENTS: 

   Midday support in the feeder cattle futures market has sparked additional 
strength through the entire cattle complex. Traders are looking for stronger 
cash cattle activity, although trade may not develop until well after futures 
markets close for the week. Corn prices are lower in light trade. May corn 
futures are 1 cent per bushel lower. Stock markets are mixed in light trade. 
The Dow Jones is 3 points lower while Nasdaq is up 10 points.

   LIVE CATTLE:

   Early mixed trade is being replaced by moderate buyer support at midday. The 
combination of optimism surrounding the potential for higher cash cattle trade 
and the aggressive price strength seen in feeder cattle futures have moved 
summer contracts to triple-digit gains. It is uncertain just how much 
additional buyer interest will develop through the rest of the session, and if 
current gains can hold, but for now, stronger prices are firmly holding. Cash 
cattle trade remains at a standstill despite the ability for bids to be seen in 
all areas. Bids are being offered from $160 to $162 per cwt live basis, with 
most bids at $160, and $258 to $260 dressed basis. But at this point in the 
day, feeders are unwilling to settle on these price levels given the 
bullishness through the rest of the complex through the week. Asking prices are 
around $165 and higher in the South and $265 to $266 in the North. Beef 
cut-outs at midday are lower, $0.34 lower (select) and down $0.24 per cwt 
(choice) with light movement of 58 total loads reported (45 loads of choice 
cuts, 6 loads of select cuts, zero loads of trimmings, seven loads of ground 
beef).

   FEEDER CATTLE:

   End-of-week buying activity has quickly developed Friday morning with prices 
in surging $2 per cwt higher or greater in all 2015 contracts except the 
September contract. The focus on increased open interest and the recent 
direction of the weekly chart is creating some underlying bullishness to 
quickly flood into the market.   

   LEAN HOGS:

   Trade through the lean hog futures market has remains sluggish through the 
morning with prices hovering between 20 cents lower and 20 cents higher in most 
contracts. The lack of support through the market is likely to continue through 
the end of the session, with very little additional direction coming from 
market fundamentals at the end of the week. Cash prices are lower on the 
National Direct morning cash hog report. The weighted average price fell $1.13 
per cwt, to $54.83 with a full range of $49.00 to $57.00 per cwt on 2,896 head 
selling. Cash prices are unreported due to confidentiality on the Iowa 
Minnesota Direct morning cash hog report. The National Pork Plant Report is 
reported 178 loads selling as prices falling $1.17 per cwt. Lean hog index for 
3/25 is at $60.81 down 0.50, with a projected two-day index of $60.39 down 
0.42.  

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


(SK)

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