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DTN Midday Livestock Comments          03/23 11:35

   Timid and Skeptical Tones Dominate Livestock Complex Midday Thursday

   The livestock contracts are trading mostly lower as traders continue to 
handle the livestock contracts cautiously.

ShayLe Stewart
DTN Livestock Analyst


   The livestock complex is mostly trending lower, although traders would 
likely push the cattle contracts higher if given a supportive reason to do so. 
The lean hog complex cannot muster up any support, and its market continues to 
bleed lower. May corn is down 5 1/2 cents per bushel and May soybean meal is 
down $11.50. The Dow Jones Industrial Average is up 344.17 points.


   The live cattle complex would like to rally after receiving a supportive 
export report Thursday morning, but instead the market is trading mostly lower, 
keeping in line with the earlier part of the week's trend. April live cattle 
are down $0.17 at $162.12, June live cattle are down $0.07 at $155.82 and 
August live cattle are down $0.15 at $155.87. The cash cattle market has not 
seen any more trade develop as packers are thankful to have had cattle bought 
early in the week when the market's morale was even lower, and feedlots are 
wishing that they would have been more patient. On Wednesday, Southern live 
cattle traded for $163, which is $1.00 lower than last week's weighted average, 
and Northern dressed cattle traded for $264 to $265, which is steady to $1.00 
higher than the previous week's weighted average. More trade will need to 
develop ahead of the week's end.

   Beef net sales of 18,600 mt for 2023 were up 5% from the previous week and 
59% from the prior four-week average. The three primary buyers were South Korea 
(10,800 mt), Japan (3,600 mt) and China (1,500 mt).

   Boxed beef prices are mixed: choice up $1.95 ($283.25) and select down $0.32 
($269.50) with a movement of 71 loads (53.02 loads of choice, 8.06 loads of 
select, zero loads of trim and 10.08 loads of ground beef).


   With the live cattle market lending no support, the feeder cattle contracts 
are trying to look at the corn market's $0.03 to $0.04 regression and continue 
to trade higher, but only some of the nearby contracts are pulling that off. 
April feeders are up $0.32 at $194.70, May feeders are down $0.42 at $198.35 
and August feeders are down $0.05 at $214.52. I still find the price spread 
between May and August to be incredible -- with a $16.17 difference. The market 
is braced for the clear reality that supplies are likely going to be 
significantly thinner in the second half of the year for feeder cattle.


   Even with a supportive export report, the lean hog complex continues to 
trend lower. With all support levels having been broken through, the real 
question in Thursday's extremely pressured lean hog market is: where is the 
bottom? Unfortunately, until pork demand increases here domestically, and 
packers feel somewhat pressured when looking for upcoming supplies, the market 
will likely remain depressed. The last USDA WASDE report was clear that demand 
should increase in the third quarter and supplies should also tighten -- I just 
hope the market finds some support before then. April lean hogs are up $0.12 at 
$76.20, June lean hogs are down $0.32 at $89.02 and July lean hogs are down 
$0.10 at $91.30.

   Pork net sales of 38,000 mt for 2023 were up 7% from the previous week and 
8% from the prior four-week average. The three primary buyers were Mexico 
(18,400 mt), Canada (4,800 mt) and Japan (4,400 mt).

   The projected lean hog index for March 22 is down $0.44 at $77.39, and the 
actual index for March 21 is down $0.84 at $77.83. Hog prices are lower on the 
Daily Direct Morning Hog Report, down $0.79 with a weighted average of $76.50, 
ranging from $72.00 to $77.50 on 5,615 head and a five-day rolling average of 
$76.99. Pork cutouts total 113.20 loads with 104.41 loads of pork cuts and 8.79 
loads of trim. Pork cutout values: up $0.83, $80.69.

   ShayLe Stewart can be reached

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