Wednesday, March 3, 2021  
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DTN Midday Livestock Comments          03/02 11:39

   Lean Hogs See Sharp Losses

   Lean hog futures are sharply lower as traders become leery of how far the 
contract has advanced since the first of the year. 

ShayLe Stewart
DTN Livestock Analyst


   Tuesday started out rough, but as time ticks closer and closer to the noon 
hour live cattle futures are seeing more interest develop. Traders aren't 
willing to boldly support the market until they can understand how this week's 
cash cattle will trade. But strong trade throughout the futures complex does 
help feedlots gain their desire of stronger cash prices. May corn is up 9 1/2 
cents per bushel and May soybean meal is up $2.90. The Dow Jones Industrial 
Average is down 26.27 points and NASDAQ is down 121.92 points.


   As the day advances closer and closer to noon, live cattle futures are 
seeing more support develop throughout the complex. April live cattle are up 
$0.45 at $119.42, June live cattle are up $0.10 at $117.60 and August live 
cattle are up $0.07 at $116.57. The environment surrounding the live cattle 
market is still on shaky ground given the weak cash cattle prices that have 
come as a disappointment to feedlots over the last four weeks. Regardless of 
what the board does, feedlots know that with the April contract trading around 
$120, now is their time to push the cash market -- especially while packers are 
running swift chain speeds to get cattle processed. Bids are still unfound 
throughout the countryside and it's unlikely any worthy interest will develop 
until after the Fed Cattle Exchange. Asking prices in the South are $116 and 
the North has yet to share their asking prices.

   Boxed beef prices are lower: choice down $2.07 ($236.96) and select down 
$1.10 ($226.54) with a movement of 66 loads (40.38 loads of choice, 12.69 loads 
of select, 4.13 loads of trim and 8.94 loads of ground beef).


   The pressure of rallying corn prices and a weak cattle complex does not sit 
well with feeder cattle futures. Last week the feeder cattle contracts fought 
to maintain some level of steadiness, but upon this week's arrival sharp losses 
have been endured with only spotty support strengthening the live cattle 
sector; this could be the theme for the week for the feeder cattle contracts. 
March feeders are down $1.30 at $135.90, April feeders are down $1.45 at 
$139.67 and May feeders closed $1.37 lower at $142.52. 


   Lean hog futures are tumbling lower, feeling the sharpest losses in the 
nearby contracts as traders are now uncomfortable with the market's elevated 
levels. April lean hogs are down $2.17 at $85.55, June lean hogs are down $1.67 
at $93.27 and July lean hogs are down $1.25 at $93.87. It may seem odd that the 
contracts are moving lower while the morning pork cutout values are up a 
whopping $7.08, but remember the day isn't over until we've seen the afternoon 
cutout close from which the midday value can vary exponentially.

   The projected CME Lean Hog index for 2/26/2021 is up $1.20 at $81.90 and the 
actual index for 2/25/2021 is up $0.75 at $80.70. Hog prices are higher on the 
National Direct Morning Hog Report, up $0.46 with a weighted average of $78.42, 
ranging from $76.67 to $85.00 on 4,740 head and a five-day rolling average of 
$76.42. Pork cutouts total 242.23 loads with 222.14 loads of pork cuts and 
20.09 loads of trim. Pork cutout values: up $7.08, $99.45.

   ShayLe Stewart can be reached

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