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DTN Midday Livestock Comments          03/29 11:32

   Headline: Cattle Hold Firm, Hogs Lower Ahead of USDA Inventory Report

   Active futures contracts for live cattle and feeders were modestly higher 
Wednesday as outside market concerns continue to ease, regarding bank concerns. 
Lean hogs were trading lower, one day ahead of a USDA report that is expected 
to show higher numbers of hogs and pigs in the country. 

Todd Hultman
DTN Lead Analyst

GENERAL COMMENTS:

   June live cattle are trading modestly higher for a fourth consecutive day as 
the market shakeout from concerns in the banking system appear to be 
diminishing. June lean hogs are trading lower with ongoing concerns about a 
recent expansion of hog numbers that will likely show up in Thursday's USDA 
report.

LIVE CATTLE:

   Live cattle futures are slightly higher at mid-morning Wednesday with the 
June contract up 60 cents at $159.50. It is no secret cattle numbers are down 
and this week's prices have been helped by an easing of concerns about recent 
bank failures. So far this week, boxed beef prices have been steady to higher, 
a good sign of active retail demand. Slaughter has also stayed active with Dow 
Jones estimating 126,000 on Wednesday, even with last week.  

   As often happens when cattle supplies are tight, cash trade is slow to 
develop this week and there may be some interruption in the North with more 
winter storms expected from South Dakota to Michigan Friday and early next 
week. The sell-off of cattle prices in March related to fears about the banking 
system shook some specs out of their long positions, but fundamentally, this 
market continues to have its eyes set on higher prices as long as there 
continues to be plenty of demand for available cattle.

   Boxed beef prices were mixed early Wednesday: choice up $0.46 at $281.09 and 
select down $0.79 at $269.57 with a movement of 60 loads (37.43 loads of 
choice, 8.90 loads of select, 4.91 loads of trim and 9.18 loads of ground beef).

FEEDER CATTLE:

   At mid-morning Wednesday, May feeder cattle are up $1.42 at $202.22, holding 
firm after Monday's $3.82 jump. Outside fears about the economy took prices to 
one-month lows in March, but that limited of a sell-off shows how firm feeder 
prices are. The obvious support is coming from those that know more feeders 
will be needed in the months ahead as cattle supplies struggle to keep up with 
beef demand. A chance for greener pastures in the northwestern Plains this 
spring also suggests an opportunity for holding back cattle in 2023.  

   Overall, spot feeder cattle prices are trading near their highest prices 
since 2015 and remain well-supported in spite of the strain of high feed costs. 
The CME Feeder Index posted $191.34 for Monday, March 27, up $3.56 from a week 
ago.

LEAN HOGS:

   At mid-morning Wednesday, June hog futures are trading down $2.05 at $90.67, 
unable to hold a gain for the week with USDA's Hogs and Pigs report due out at 
2 p.m. CDT Thursday. USDA's same report for December 1 said all hogs totaled 
73.1 million head, down 2% from a year ago, but given the behavior of cash 
prices since then, it seems reasonable to say there have been more hogs 
available than expected. Pre-report surveys suggest the March 1 inventory will 
be up slightly from a year ago, near 72.5 million head. It will also be 
interesting to see if any December totals get revised upward.

   Cash hog prices in Wednesday's Daily Direct Hog morning report remained 
under pressure with negotiated trades averaging 75.95 cents per pound and the 
swine formula base averaging 74.44. USDA's morning pork report posted 
Wednesday's cutouts up $1.16 at $81.16, helped by a $13.54 gain in bellies. 
USDA reported 147.28 loads of pork cuts and 28.66 loads of trim. Hog slaughter 
remains active and was estimated by Dow Jones at 484,00 for Wednesday, up 1,000 
from last week. CME's lean hog index was projected at 73.05 for Thursday, up 41 
cents from a week ago. The projected lean hog index for 3/27/2023 is down $0.32 
at $76.25, and the actual index for 3/24/2023 is down $0.42 at $76.57.

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




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