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DTN Midday Livestock Comments          03/04 11:38

   Thursday's Export Report Tries to Encourage Livestock Sector

   It's a tough environment for the livestock contracts as cash cattle are 
trending steady to somewhat lower and the lean hog market is running out of 
gas. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   Live cattle futures would like to rally higher but that's somewhat hard to 
do when the cash cattle market is drifting lower. The livestock contracts were 
positively energized by Thursday's strong export report, but the market still 
must weigh out the current fundamental tones before it can jump to solely 
trading higher and relish in the market's demand. May corn is up 2 3/4 cents 
per bushel and May soybean meal is up $2.30. The Dow Jones Industrial Average 
is up 38.56 points and NASDAQ is down 48.79 points.

   LIVE CATTLE:

   It's too bad so many cattle traded Wednesday as Thursday could have 
supported the cash cattle market a little bit more after seeing the positive 
news from the weekly export report. The live cattle contracts are trying to 
trade higher, but with cash cattle selling steady to somewhat weaker the 
support to rally the contracts just isn't there. April live cattle are down 
$0.02 at $119.37, June live cattle are up $0.12 at $117.80 and August live 
cattle are up $0.12 at $117.02. The cash cattle market is pretty quiet 
following Wednesday's trade with just a few scattered bids being offered. Bids 
of $114 and $180 are noted in Iowa. Nebraska has seen some bids come in at $178 
and the South is noting light packer inquiry but no bids thus far.

   Beef net sales of 22,600 metric tons (mt) reported for 2021 were up 
noticeably from the previous week and up 15% from the prior 4-week average. The 
three primary increases were from South Korea (6,800 mt), China (2,400 mt) and 
Japan (3,800 mt).

   Boxed beef prices are mixed: choice up $0.88 ($233.91) and select down $2.01 
($222.23) with a movement of 66 loads (29.26 loads of choice, 12.02 loads of 
select, 14.11 loads of trim and 10.75 loads of ground beef).

   FEEDER CATTLE:

   It's another lower day in the feeder cattle futures as corn prices are 
creeping higher. The futures are skeptical of the technical levels while 
fundamental support lags and the cash cattle market is steady to weaker this 
week. March feeders are down $0.70 at $136.30, April feeders are down $1.12 at 
$140.17 and May feeders are down $0.92 at $143.65. It's unlikely feeder cattle 
prices throughout the countryside will improve before the week's end with cost 
of gains continuing to scale higher. But demand for grass calves continues to 
be where the market is finding most of its interest.

   LEAN HOGS:

   Support throughout the lean hog futures has been hit or miss Thursday 
morning as the contracts try to decide if the market has much upward momentum 
left in this run or not. The market has had such a fruitful rally, traders are 
growing leery but are still trying to gauge how much long-term demand is going 
to be pumped into the market as China struggles to get their African swine 
fever issue under control. April lean hogs are down $0.02 at $87.90, June lean 
hogs are up $0.10 at $94.95 and July lean hogs are down $0.05 at $95.42.

   The projected two-day CME Lean Hog Index for 3/3/2021 is up $0.79 at $84.06, 
and the actual index for 3/2/2021 is up $0.64 at $83.27. Hog prices are sharply 
higher on the National Direct Afternoon Hog Report, up $5.31 with a weighted 
average of $84.73, ranging from $75.00 to $89.00 on 5,931 head and a five-day 
rolling average of $79.88. Pork cutouts total 140.71 loads with 125.58 loads of 
pork cuts and 15.13 loads of trim. Pork cutout values: up $6.02, $97.43.

   Pork net sales of 59,600 metric tons (mt) reported for 2021 were up 
noticeably from the previous week and up 68% from the prior 4-week average. The 
three primary increases were from China (28,000 mt), Mexico (14,500 mt) and 
Japan (4,600 mt).

   ShayLe Stewart can be reached shayle.stewart@dtn.com




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