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DTN Midday Livestock Comments          03/01 11:36

   Lean Hogs are Back to Trading Fully Higher 

   Livestock futures are trading in completely opposite directions as the 
cattle contracts can't muster up any support while the lean hog contracts take 
the day in stride. 

ShayLe Stewart
DTN Livestock Analyst


   Cattle futures continue to trade unsupported and doggishly; traders aren't 
willing to invest in the contracts until better fundamental support develops. 
Lean hog futures continue to trade higher, taking the day in stride as both 
higher pork cutout values and a strong cash hog market encourage the upward 
push. May corn is down 8 3/4 cents per bushel and May soybean meal is down 
$2.90. The Dow Jones Industrial Average is up 622.76 points and NASDAQ is up 
317.20 points.


   Live cattle futures can finally see eye-to-eye with the April contract as 
last week the February contract expired. April live cattle are down $0.80 at 
$119.22, June live cattle are down $0.87 at $117.55 and August live cattle are 
down $0.57 at $116.47. With last week's disappointing cash trade unable to 
break above $114, morale throughout the live cattle sector has lessened. 
Thankfully feedlots are relentless and are expected to price their cattle fully 
higher again this week. With boxed beef prices being the second highest they've 
ever been for this time, and live cattle prices being the lowest for late 
February/early March in the last ten years, feedlots are sick and tired of 
these prices and are going to demand the market pay dividends here shortly. 
Thankfully the closer and closer the market gets to the second quarter, the 
supplies of readily available fed cattle begin to dwindle, which will favor the 
feedlots' position. Showlists this week are higher in Texas, but lower in 
Kansas, Colorado and Nebraska.

   Boxed beef prices are higher: choice up $0.45 ($240.98) and select up $1.69 
($231.42) with a movement of 35 loads (20.23 loads of choice, 5.80 loads of 
select, zero loads of trim and 9.19 loads of ground beef).


   As feeder cattle futures continue to feel pressure from a strong corn market 
and the lack of packer interest in the cash cattle market, feeder cattle 
contracts are left with few options but to trade lower. March feeders are down 
$1.45 at $137.22, April feeders are down $1.37 at $141.20 and May feeders are 
down $1.17 at $143.90. Until the market sees a surge in cash cattle prices, 
cattle buyers' hands are tied as they can't afford to buy cattle high and then 
sell them low with cost of gains being at or above $1.00 per day.


   Following last week's weaker close, lean hog futures had a lot of eyes 
watching their movement Monday morning as many wondered if the market's top was 
finally in. But as the lean hog contracts have done time and time again since 
the beginning of the year, the market trudged into this week's trade fully 
higher, looking to take more if the market will support its ambition. April 
lean hogs are up $1.40 at $88.55, June lean hogs are up $1.57 at $95.75 and 
July lean hogs are up $0.97 at $95.52. Seeing that the market has grown to such 
elevated levels, and that fundamental support has been hit or miss over the 
last few trading days, leaves one to believe the market will be seeing a 
correction sooner rather than later.

   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 $0.68 with a weighted average of $77.96, 
ranging from $73.00 to $84.00 on 4,678 head and a five-day rolling average of 
$75.08. Pork cutouts total 151.88 loads with 125.69 loads of pork cuts and 
26.19 loads of trim. Pork cutout values: up $1.51, $95.35.

   ShayLe Stewart can be reached

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