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DTN Midday Livestock Comments          02/25 11:39

   Lighter Exports Send Lean Hogs Lower

   While the live cattle and lean hog futures dip lower, the feeder cattle 
contracts are soaking up all the market's support while corn prices trend 
modestly lower. 

ShayLe Stewart
DTN Livestock Analyst


   Feeder cattle futures are rallying while the corn market teeters lower and 
the live cattle and lean hog contracts are licking their wounds from a lighter 
export report. Some more cash cattle interest has developed as packers are 
offering $114 in parts of Kansas and Nebraska. But feedlots aren't interested 
in seeing the market trade steady again this week. May corn is down 7 cents per 
bushel and May soybean meal is up $0.20. The Dow Jones Industrial Average is 
down 290.26 points and NASDAQ is down 302.70 points.


   Live cattle futures are being pressured to trade mostly lower as the market 
wonders where the week's cash cattle market will end up and where the week's 
official slaughter count will land and is absorbing the aftermath of a weaker 
export report. April live cattle are down $0.20 at $122.00, June live cattle 
are down $0.32 at $119.77 and August live cattle are down $0.37 at $118.22. 
Following the specialty Fed Cattle Exchange Thursday morning, the cash cattle 
market has seen a little more interest develop as bids of $114 have surfaced in 
both Kansas and Nebraska. Packers would love nothing more than to get their 
cattle bought this week at $114 and avoid moving the market to $115 (or heaven 
forbid $116), but feedlots are getting tired of these doggish cash cattle 
prices. The later the week plays out, the more likely packers are going to be 
laying $115 on the table; with aggressive slaughter speeds, feedlots should 
hold their ground.

   The Special Fed Cattle Exchange Auction hosted Thursday morning listed a 
total of 790 head (Texas 662 head, Kansas 54 head, Oklahoma 74 head) of which 
none sold as they did not meet the reserve prices ranging from $115 to $116. 
Opening prices were at $113.50, high bids ranged from $114.25 to $114.50. 
Seeing that no cattle sold on Thursday's Special FCE Auction, the market will 
host another specialty sale Friday morning to offer the cattle to buyers.

   Beef net sales of 8,500 metric tons (mt) reported for 2021 were down 63% 
from the previous week and 66% from the prior 4-week average. The three largest 
buyers were South Korea (3,800 mt), Japan (3,100 mt) and Mexico (700 mt).

   Boxed beef prices are lower: choice down $0.08 ($240.67) and select down 
$0.55 ($229.24) with a movement of 30 loads (17.06 loads of choice, 5.12 loads 
of select, zero loads of trim and 7.90 loads of ground beef).


   Feeder cattle futures are enjoying the regression in the corn market and are 
trading modestly higher while the other livestock contracts are facing some 
modest pressure. March feeders are up $0.10 at $140.47, April feeders are up 
$0.40 at $145.15 and May feeders are up $0.45 at $147.25. Traders are leery of 
the live cattle contracts given the unknown nature of this week's cash cattle 
market and leery of the lean hog market because of the weaker export report. 
All of which gives traders the green light to invest in feeder cattle contracts 
as it's a safe investment while demand is strong throughout sale barns and the 
board is far from any resistance pressure.


   After a disappointing export report, the lean hog contracts have opted to 
scale lower after an incredible rally all this week. The spot April contract is 
still defending its higher positions, but the rest of the complex is trading 
mildly lower until the third quarter of 2021 which is trading with sharper 
losses. April lean hogs are up $0.25 at $89.67, June lean hogs are down $0.27 
at $95.65 and July lean hogs are down $0.30 at $95.12.

   Pork net sales of 25,600 mt reported for 2021 were down 23% from the 
previous week and 40% from the prior 4-week average. The three largest buyers 
were Japan (4,100 mt), China (3,700 mt) and South Korea (3,200 mt).

   The projected CME Lean Hog Index for 2/24/2021 is up $0.82 at $79.95 and the 
actual index for 2/23/2021 is up $0.97 at $79.13. Hog prices are higher on the 
National Direct Morning Hog Report, up $1.07 with a weighted average of $75.13, 
ranging from $70.00 to $78.00 on 5,125 head and a five-day rolling average of 
$72.42. Pork cutouts total 141.42 loads with 128.33 loads of pork cuts and 
13.09 loads of trim. Pork cutout values: up $2.25, $94.39.

   ShayLe Stewart can be reached

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