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DTN Midday Livestock Comments          04/01 11:52

   Cattle Pressure Develops April 1

   Light pressure has developed through the cattle futures complex Wednesday as 
traders continue to focus on cash market direct and adjust positions to a fresh 
month and quarter. Light support remains in lean hog futures, although trade 
remains light. 

By Rick Kment
DTN Analyst


   Light trade is seen through the livestock complex Wednesday morning. Cattle 
futures are seeing the most significant price shifts with buyers and seller 
interest seemingly moving back and forth through the first day of April. Lean 
hog futures are being driven by light follow-through buying interest based on 
production adjustments through the end of the year. Corn prices are higher in 
light trade. May corn futures are 2 cents per bushel higher. Stock markets are 
lower in light trade. The Dow Jones is 98 points lower while Nasdaq is down 38 


   It appears that with all of the end-of-month and -quarter positioning that 
needed to be done in the books, and traders assessing early April movements, 
that trade volume is slowing through the cattle complex. With futures contracts 
closed Friday for Good Friday, it is likely that overall volume through the 
entire livestock market may remain sluggish through the rest of the week. This 
could bring about additional up and down price shifts like seen through the 
morning Wednesday. Cash cattle trade is still relatively quiet, although a few 
bids have been generated in the South at $260 per cwt. It is expected that 
packer interest will improve through the rest of the day, but also likely that 
active trade may not be seen until sometime Thursday or Friday. Asking prices 
are remain at $167 and higher in the South and $268 and higher in the North. 
Beef cut-outs at midday are higher, $1.97 higher (select) and up $1.67 per cwt 
(choice) with active movement of 121 total loads reported (63 loads of choice 
cuts, 25 loads of select cuts, 14 loads of trimmings, 19 loads of ground beef).


   Light gains have redeveloped in front-month April futures at midday 
following midmorning pressure. There started to be some swift early-month 
position shifting through the cattle complex Wednesday morning as moderate to 
strong gains developed early, but quickly gave way to moderate losses. The up 
and down shifts seen through the trading session are keeping the market 
relatively directionless at this point, with the expectation that markets may 
remain in this state through the rest of the session. Even though firm support 
is seen in beef values, traders are focusing on the movement in cash cattle 
trade at the end of the week as well as outside market direction. 


   Narrow gains continue to hold through lean hog futures trade Wednesday 
morning although trade volume has remained sluggish. The focus has moved away 
from short-term supply levels and potential hog availability through the end of 
the year. This is doing very little to help support short-term fundamentals and 
cash markets, but it seems to be helping to draw light long-term buyer interest 
back into the market. The ability to rebuild open interest through early April 
could help to spark additional market support during summer months. Cash prices 
are higher on the National Direct morning cash hog report. The weighted average 
price gained $0.34 per cwt, to $55.27 with a full range of $50.00 to $57.00 per 
cwt on 7,424 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 307 loads selling as prices fell $1.13 per cwt. Lean hog 
index for 3/30 is at $59.70 down 0.26, with a projected two-day index of $59.68 
down 0.02.  

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


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