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DTN Closing Livestock Comment 03/22 17:29

   Uncertainty Sweeps Through Hog Trade

   Hog futures showed their first signs of uncertainty Friday morning as 
traders pulled back from limit gains in summer trade. Trading stabilized late 
in the session, resulting in a mixed close.

By Rick Kment
DTN Analyst


   GENERAL COMMENTS: Livestock futures traded in a wide range Friday. Lean hogs 
futures moved from early limit gains to aggressive losses through the morning, 
but stability returned Friday afternoon and prices settled mixed at closing 
bell. Cattle markets were also affected by the volatility in lean hogs. From 
Friday to Friday, livestock futures scored the following changes: Apr LC up 
$0.63; Jun LC up $1.58; Mar FC up $1.68; Apr FC up $1.88; Apr LH up $9.53; May 
LH up $9.13. Cash cattle trade started to slowly develop Friday with trade 
extending into late afternoon and potentially Friday evening. The cash trade 
that has developed so far is seen at $128 to $129 live basis, which is $1 to $2 
per cwt higher than last week. Dressed trade developed at $208 through the 
north, which is $4 per cwt higher than week-ago levels. The National Daily 
Direct afternoon hog report was $3.29 higher ($56-$71.50, weighted average 
$66.44) on 6,234 head sold. Corn futures were higher in light activity with May 
up 2 cents per bushel. The Dow Jones Index is 460 points lower with the Nasdaq 
down 196 points.

   LIVE CATTLE: Narrowly mixed trade left cattle markets directionless Friday 
($0.40 lower to $0.40 higher). Live cattle trade struggled to find any sense of 
market support despite initial market gains through the complex. The lack of 
underlying support in beef values listed in the morning report as well as 
general shift in hog market direction seemed to cause most traders to hunker 
down and focus on market stability through the end of the week. Beef cut-outs: 
mixed, $0.27 higher (select, $218.64) and down $0.22 (choice, $229.09) with 
light demand and light to moderate offerings, 72 loads (43 loads of choice 
cuts, 8 loads of select cuts, 8 load of trimmings, 13 loads of coarse grinds).

   MONDAY'S CASH CATTLE CALL: Steady. Packers and feeders will start over 
Monday morning following late-day trade Friday, which pushed cash markets 
higher. Monday's session will be focusing on showlist distribution and 

   FEEDER CATTLE: Early support in feeder cattle gave way to a mixed close 
($0.12 lower to $1.42 higher). Nearby contracts were narrowly mixed with 
limited interest developing through the entire complex. The USDA Cattle on Feed 
report, released following the market close, is expected to limit support early 
next week following cattle placement levels of 102%, which was 6% above early 
estimates. CME cash feeder index for 3/21 is $141.02, up $1.90 

   LEAN HOGS: Wide price shifts left hog markets vulnerable and will likely 
lead to further uncertainty next week. Futures closed $1.35 lower to $1.07 
higher. Sharp gains developed early Friday, as traders took advantage of 
another day of expanded trading limits. But once initial buying slowed, 
pressure quickly developed, resulting in several summer contracts traded in a 
$6.50- to $7-per-cwt range during the session. This may be the widest one-day 
market shift in the lean hog complex since expanded limits were introduced. 
Light buying trickled into the market late in the session, leaving futures 
mixed, but avoiding a disastrous meltdown at the end of the week. Continued 
price support moved into wholesale pork values with triple-digit gains seen in 
most primal cuts. Pork cutout values added $1.54 per cwt, moving to $77.79 per 
cwt, on 336 loads. CME cash lean index for 3/20 is $60.75, up $1.53. DTN 
Projected lean index for 3/21 $62.41, up $1.66.

   MONDAY'S CASH HOG CALL: Steady to $2. Firm follow-through support is 
expected to develop early next week despite the pullback in futures at the end 
of the week. Monday slaughter is expected at 477,000 head.

   Rick Kment can be reached at 


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