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DTN Midday Livestock Comments 03/31 11:10

31 Mar 2023
DTN Midday Livestock Comments 03/31 11:10 Livestock Futures Higher After Bullish Cash Trade, Neutral Hog Report Active futures contracts of live cattle, feeders and lean hogs are all higher at midmorning Friday, finding support after an eruption of higher cash cattle trade Thursday and a neutral Hogs and Pigs report. Todd Hultman DTN Lead Analyst GENERAL COMMENTS: June cattle and May feeders continue to trade higher this week, encouraged by higher cash trade Thursday and a lack of distraction from outside markets. June lean hogs started lower but are modestly higher at midmorning as traders digest Thursday's afternoon's Hogs and Pigs report. LIVE CATTLE: Live cattle futures are higher at midmorning Friday with the June contract up 75 cents at $161.75, approaching its contract high at $161.90. Light to moderate cash trade took place Thursday in producers' favor. Live trade in the South was mostly around $167, up $4 on the week, while live trade in the North was reported from $168 to $172, up $3 to $7 from last week's weighted averages. Northern dressed trade was mostly $270 to $272, up $5 to $6 from last week. We'll keep watching for any remaining reports Friday, but the week's business could be done. A winter storm is developing in South Dakota Friday morning, expected to work eastward to Wisconsin later in the day. Much of the Midwest and southern Midwest is at risk of severe weather Friday with high winds expected. Meanwhile, red flag warnings are posted throughout the southwestern Plains as conditions remain hostile to livestock and vegetation. Also helping this week's higher cattle prices, traders' worries about the banking sector has calmed down and boxed beef prices haven't changed much from last Friday, a good sign of retail demand. Boxed beef prices were higher early Friday with choice up $2.45 at $281.65 and selects up $1.38 at $269.84, based on a movement of 70 loads. Slaughter has stayed active this week, but on Friday, Dow Jones is estimating only 115,000 head, down from 117,000 last week. Saturday's slaughter is estimated at 15,000, 1,000 less than last week. FEEDER CATTLE: At midmorning Friday, May feeder cattle are up $1.35 at $205.80, approaching the contract high at $207.02 after seeing Thursday's higher cash prices for live cattle. These are also near the highest spot prices for feeder cattle since 2015. Helped earlier this week by an easing of concerns about the economy, feeder cattle prices shot higher, knowing that as long as demand for U.S. beef remains active, cattle and feeder cattle prices are almost certain to keep going higher, given the limited number of cattle available. At some point, high prices will slow that demand, but we don't see many signs of that yet. Friday's winter storm appears to be starting in western South Dakota and will move eastward as the day goes on. Another winter storm is expected to take a similar track next week. If there is good news from this, it is that chances are looking better for green pastures in the northwestern states this spring. The southwestern Plains, unfortunately, have not had the moisture and are expected to remain in drought early in 2023. Technically speaking, the trend in May feeder cattle continues to point up, supported by a need for more feeders in the months ahead. The latest CME Feeder Index was up $1.08 at $192.35 for Wednesday, March 29. LEAN HOGS: At midmorning Friday, June hog futures are trading up 40 cents at $92.00, a neutral response to Thursday afternoon's Hogs and Pigs report. The report was neutral on the surface, but a little bearish for cash prices and April futures and a little supportive for back months. The all hogs and pigs inventory for March 1 was as expected at 72.86 million head. Adding bearish pressure to cash prices, USDA revised the Dec. 1 inventory up 1.28 million head and said available hogs weighing 180 pounds or more were up 2% from a year ago. On the supportive side for back months, March-May farrowing intentions were down 1% from a year ago and a little less than expected. June-August farrowing intentions were down 3% from a year ago. April hogs are trading down 85 cents at 75.60. With the report now in the rearview mirror, it is back to business with Dow Jones estimating Friday's slaughter at 480,000, up from 479,000 last week. Saturday's slaughter is expected at 97,000, up from 64,000 last Saturday. Carcass value has been under pressure this week and was reported at $73.15 Friday morning. Cash hog prices in Friday morning's Daily Direct Hog report also remain under pressure this week with national negotiated trades averaging 76.04 cents per pound and the swine formula base averaging 73.88. The CME's latest lean hog index was was projected down 23 cents at $75.77 on March 29, 2023. Todd Hultman can be reached at Follow Todd Hultman on Twitter @ToddHultman1 (c) Copyright 2023 DTN, LLC. All rights reserved.