The market keeps on keeping on. Once again, the March cattle market seemed poised to take a step back, but managed to get some fuel to keep running. Just when it looked like the spring high was in, February’s rally found some renewed life in March.

Let’s go back and look at February. The front end of the month saw fed cattle trade being caught in sideways trade around $119-120 per cwt. But then packers began to chase cattle and the market found some new life. Fed sales ended the month at $124-5.

Similarly, March started out at mostly steady prices with the fed cattle market around $125. At least initially, it seemed the market might get caught there – meaning the 2017 spring high had been established. However, beef wholesale prices finally got some real traction and spurred another solid rally on the live side. Cattle feeders held strong for $128-129 in mid-March, and then bumped that another $3 to capture $131.The month ended a couple of bucks back at $127-128.

From a longer-run view, the four-week moving average now stands at $128; the best levels we’ve seen since last June. As noted in last month’s column, better prices on the live side would have to come through the cutout:

That said, the market’s recent strength has been fully supported on the back of better wholesale beef prices. The Choice cutout has been trending around the $120 mark – a substantial improvement given that the cutout hasn’t indexed over $200 since August. Stronger wholesale prices provided packers some room to compete for cattle in March.

Beef demand will be an especially important factor to monitor as we progress into summer. Bigger supplies and seasonally softer demand can serve as a double-whammy for prices. However, if the economy is truly picking up and consumer sentiment remains solid, better beef demand could help offset some of that seasonal slump. Time will tell.

Nevertheless, it’s likely the spring highs really are in; the market will begin to battle bigger on-feed numbers and softening demand following preparation for Memorial Day featuring.

Moreover, the futures market could find itself under even greater pressure if the non-commercials begin to unravel their collective net long position. All in all, given those considerations, the Live Cattle futures market has provided some excellent price protection opportunities of late. And if those opportunities haven’t been exploited, now would be the time.

Backing up into the longer view around demand, much of beef’s pricing power in recent years has stemmed from the quality side. This week’s Industry At A Glance highlights recent quality grade achievements for the industry and the subsequent implications of that trend. In mid-March, the weekly quality grading percentages were 8% Prime and 74% Choice – 82% combined is a new all-time record for the beef industry.

What’s most important is the outcome; better carcasses mean better eating experiences and better sales.   That’s the result of a long-run commitment to quality by the beef industry. And as noted in the column, “…that is beginning to pay real dividends for the industry. Undoubtedly, this has played an important role with respect to beef demand in recent years.”

The end of March also had the market absorbing several key grain reports. First, the Prospective Plantings report was in line with earlier estimates provided by USDA, albeit somewhat short of the general industry predictions before the report; corn acreage expectations, according to USDA, remain at 90 million acres in 2017. More surprising, soybean acreage estimate was revised upwards to 89.5 million acres – a new record.

Second, though, the end of March also has USDA releasing the quarterly Grain Stocks report. March 1 grain inventories were estimated at 8.62 billion bushels – 794 million bushels bigger than last year’s number.

Perhaps the bigger story comes from where those bushels are being held. The market has provided some excellent price protection opportunities of late. And if those opportunities haven’t been exploited, now would be the time.

Compared to the recent low in 2013, grain stocks have grown by 3.22 billion bushels – nearly 70% or 2.24 billion bushels of that increase has occurred due to on-farm storage. Widespread investment in on-farm storage is making a large difference – and will increasingly play an important role in market dynamics going forward.

In the meantime, it appears that farmers are relatively undersold. Don’t be surprised if basis behaves with lots of fits and spurts. Local basis will strengthen to induce sales off the farm. But once short-term needs are met, it will subsequently soften. That pattern may get repeated multiple times through the remainder of the marketing year.

The discussion around farm storage is an important indicator of how agriculture is changing. At times, the change seems incremental and difficult to assess. However, the grain stocks report provides solid indication that fundamental shifts have occurred – and continue to do so.

Bottom line: the business maintains lots of moving parts. With that in mind, it’s worthy of repeating every month: producers should ensure they have access to objective information that’s pertinent to their operations. That information should be filtered and reviewed with careful analysis thereby increasing the likelihood of utilizing it to make good business decisions going forward.

Firm support is seen in livestock markets have quickly developed at midday following what started out as extremely lackluster market activity. This market rally has been driven by the triple digit rally in feeder cattle markets. Lean hog futures have quickly started to move higher with firm support developing in summer contracts. Corn prices are lower in light trade. May corn futures are 4 cents lower. Stock markets are higher in light trade. The Dow Jones is 36 points higher while Nasdaq is up 9 points.

LIVE CATTLE:

Light to moderate buyer support is seen at midday with stable price moves seen across the live cattle complex Thursday morning. April through August futures are holding 50 to 60 cent gains as traders slowly moved back into the complex. April futures are attempting to move back toward $119 per cwt with beef market support focusing on summer market demand despite the uncertainty in the cash markets. Cash cattle remain quiet with bids in the North seen at $122 on a live basis and $200 dressed basis, with no bids developing in the South Thursday morning. Asking prices are currently at $128 to $130 in the South and $205 and higher in the North. But at this point, the gap between those these two levels seems massive. Beef cut-outs at midday are mixed, $0.60 higher (select) and down $1.06 per cwt (choice) with light movement of 67 total loads reported (40 loads of choice cuts, 20 loads of select cuts, no loads of trimmings, 7 loads of ground beef).

FEEDER CATTLE:

After remaining sluggish during the entire morning, strong buyer support is seen across the feeder cattle trade. This is helping to push triple digit gains in nearby contracts. April through August futures are posting $1 to $1.20 per cwt gains. With April contracts now trading above $131 per cwt, it appears that some momentum may be rekindled in the market, although at this point, there may be some uncertainty as to just how much long term support will develop following the recent choppy market shifts.

LEAN HOGS:

Lackluster trade slowly developed early in the session, based on stability seen midweek across the complex. This buyer support continued to develop during the morning and has brought additional price support back into the market. Summer contracts are now leading the market higher with June and July futures holding prices higher with markets posting 70 to 90 cent gains. This may continue to post firm market support through the end of the Thursday session as additional buyer activity is moving from the sidelines. Cash prices are lower at midday on the National Direct morning cash hog report. The weighted average price fell $1.33 at $58.51 per cwt with the range from $54.00 to $59.00 on 2,840 head reported sold. Cash prices are unreported due to confidentiality on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 139 loads selling with prices adding $0.97 per cwt. Lean hog index for 4/4 is at $66.60 down $0.47 with a projected two-day index of $66.15 down $0.45.

The general impasse at the internet auction Wednesday bore sure witness to the strong determination of both cattle buyers and sellers. Still, we are picking out some signs of less ambitious asking prices (e.g., $128 on the South; $205 to $207 in the North). Look for fairly active trade to surface late Thursday or sometime Friday. Live and feeder futures should open moderately higher, supported by follow-through buying and pre-cash short-covering.

Look for the cash hog trade to open with bids steady to $1 lower than Wednesday. Early spring pork tonnage continues to make for tough sledding in the cash market. The Saturday kill is expected to total close to 78,000, pushing the weekly total to 2.3 million. Lean futures are expected to trade mixed in the early rounds, checked by long liquidation and boosted by limited short-covering.

OTHER MARKET SENSITIVE NEWS

CATTLE: (Bloomberg News) — President Donald Trump is a well-known fan of U.S. beef. He’s hawked Trump-branded steaks, and his standard order at the 21 Club in Manhattan is a well-done burger topped with American cheese.

So beef may be on the table when the U.S. president and Chinese leader Xi Jinping discuss trade during this week’s summit at Trump’s Florida resort.

More than six months after China promised to end a ban on American beef imposed in 2003 after a case of mad-cow disease, U.S. producers still aren’t selling to Chinese consumers, according to a letter from three trade groups representing the beef industry. That’s a missed opportunity for companies such as Cargill Inc. in the biggest overseas market for U.S. agriculture, expected to reach $22.3 billion in value during the 12 months ending September.

“The foreign market with the greatest growth potential — China — remains closed to U.S. beef and beef products, even as China imports large and growing volumes from our competitors,” the National Cattlemen’s Beef Association, U.S. Meat Export Federation and North American Meat Institute said in the joint March 27 letter to Trump. “We appreciate your leadership on this matter.”

U.S. trade relations with China were a cornerstone of Trump’s campaign as he accused the nation of unfair trade practices and threatened to slap a levy on Chinese products of as much as 45 percent. Last week, he ordered a study to identify the forms of “trade abuse” that contribute to U.S. deficits with all foreign countries.

Export markets are especially important now, given hard times in Farm Belt states, where voters overwhelmingly supported Trump. Net farm income is expected to fall for a fourth straight year to $62 billion, according to U.S. Department of Agriculture data, down from a record $124 billion in 2013.

Total U.S. agricultural exports were about $134.9 billion in 2016, a 10 percent decline from two years earlier, according to the USDA.

The sector was projected to get a boost of as much as $5 billion from the Trans-Pacific Partnership — which would have opened more Asian markets for meat, grain and dairy products — but Trump pulled out of the trade deal soon after taking office.

Industry groups subsequently asked Trump to press Xi on resuming beef imports, especially considering China’s increasing appetite for meat. Per capita beef consumption increased 33 percent between 2012 and 2016, according to Bloomberg Intelligence, coinciding with a 38 percent increase in disposable income for urban Chinese households.

That helps ranchers in Australia, Brazil and Uruguay — but not the U.S. American farmers exported $10.4 billion in red meats and related products globally in January-October, according to the most recent USDA statistics.

Opening China’s beef market is a top priority for Trump’s nominee for U.S. ambassador to the nation, Iowa Governor Terry Branstad, whose state has about 26,000 cattle farmers.

“I want to serve it at the embassy, and I certainly want to do what I can to try to convince the Chinese leadership to do that sooner rather than later,” Branstad said during a USDA forum in February.

The Chinese government said in September it would lift the 2003 ban on imports of bone-in and boneless beef from U.S. livestock younger than 30 months of age — a ban triggered by a case of mad-cow disease in Washington state.

But in order for Chinese supermarkets to sell American beef, authorities need to approve proposed rules on issues including the traceability of individual animals, said Thad Lively, senior vice president for trade access at the U.S. Meat Export Federation in Denver.

The federation started working in 2015 to trace the supply chain — from ranch to meat packer — exclusively for “China-eligible” cattle. It demonstrated a tracking system in September to a Chinese delegation visiting feed lots and slaughter plants in the U.S.

However, there’s been no progress in obtaining Chinese approval, he said. The stalemate comes as agricultural exports to China this fiscal year are expected to increase by more than $3 billion from a year earlier, Robert Johansson, the USDA’s chief economist, said at the February forum. Soybeans are the biggest export to China.

China’s restriction on U.S. beef is among several policies impeding American exports of animal protein to the world’s most-populous country. China banned imports of American poultry in 2015 after an outbreak of bird flu in the Midwest, cutting off a major market for chicken feet, a popular Chinese snack.

“We are very anxious to get that market restored,” said James Sumner, president of the USA Poultry & Egg Export Council, an industry advocate based in Stone Mountain, Georgia. “I don’t think there was a single broiler company not shipping paws to China before the ban was implemented.”

China became the largest importer of U.S. agricultural products in 2011, and American beef producers want to capitalize on a growing middle class and their perceptions that foreign-made foods are better quality than homegrown ones.

Minneapolis-based Cargill, the biggest closely held U.S. company and one of the top grain traders, didn’t have much beef business with China before the ban. That may not be the case if Trump and Xi can work out a deal.

“There is significant potential for U.S. beef exports when China grants access,” Mike Martin, a Wichita, Kansas-based spokesman, said in an email.

HOGS: (brownfieldagnews.com) — Iowa Senator Chuck Grassley has reintroduced legislation to ban packer ownership of livestock.

“I’ve put this bill in every year for the last 20 years, “Grassley says. “Sometimes we get it through the Senate on a farm bill, but we never get it through. But I don’t give up and sometime this is going to happen.”

Continued concentration and vertical integration in the meat industry is hurting family farmers, Grassley says.

“First the poultry industry, then we saw the pork industry going the same direction,” he says. “Thursday I receive consistent contact from cattlemen concerned that their industry is headed that way as well, to vertical integration.”

Grassley cites USDA figures showing the amount of cattle traded on the cash market declined from 52 percent in 2005 to 21 percent in 2015. “That’s a very clear indication that the beef industry is headed the way of pork and poultry, which have cash-traded levels well below 20 percent.”

Grassley says packers are needed to harvest livestock, but he says adequate competition is also needed for “fair and efficient price discovery”.

For the most part, cash cattle trade remains poorly defined Wednesday afternoon. Reports of one regional buyer in Nebraska paying $200 per cwt for several pens of cattle have surfaced. But other than that, cattle sales have been undeveloped. Cattle sales on the Fed Cattle Exchange were undeveloped with no sales taking place on all 3,529 head offered on the exchange during the morning. Bids in feedlot country are seen at $122 live. Asking prices are at $130 in the South and $205 in the North. It is likely that active trade will be seen Thursday or Friday, but at this point, it is uncertain just how many cattle will need to be sold through the week. According to the closing report, the national hog base is $0.14 lower compared with the prior day settlement ($55.00-$61.00, weighted average $59.85). The corn trade bounced higher in light activity. May futures posted a 1 cent gain Tuesday. The Dow Jones Index is 70 points higher with the Nasdaq up 5 points.

LIVE CATTLE

Live cattle futures quickly moved to nearly stable market moves ($0.07 lower to $0.12 higher) following what started out to be a volatile and aggressive turn lower Wednesday morning. The early pressure quickly focused on the early week pressure in the cattle complex, which is accounting for expected cash cattle trade and recent weakness in the futures markets. There is likely to be some additional selling pressure developing across the complex, but the entire market stabilized in the last hour of trade and moved to single-digit market moves in all but one contract month. It is unlikely that any additional market strength will develop in the near future, but traders seem to have temporarily found a sense of stability near $118 per cwt and are willing to take a breath. Beef cut-outs: mixed, $0.12 higher (select, $200.51) to down 1.98 (choice, $209.71) with light demand and moderate offerings (100 loads of choice cuts, 24 loads of select cuts, 13 loads of trimmings, 34 loads of coarse grinds).

THURSDAY’S CASH CATTLE CALL:

Steady to $2 lower. The lack of internet sales on the Fed Cattle exchange while over 3,500 head were offered indicated the standoff between buyers and sellers this week. Cash markets remain extremely slow with a wide gap between asking prices and bids that are extremely slow to develop midweek. This could allow for trade to develop late in the week. On the other hand, only limited trade may be seen through the week given the early activity of market participants and how strongly they feel about market moves.

FEEDER CATTLE

Despite spending most of the trading session firmly lower, feeder cattle closed mixed in a narrow range ($0.50 lower to $0.12 higher). Traders early in the session continued to back away from previous market prices with front-month April contracts testing prices near $129.50 per cwt. This softness was limited by lack of follow-through seller activity at the end of the trading session as overall volume quickly evaporated through the last hour of trade. This was seen through the entire livestock market. CME cash feeder index: 4/4: $133.13, down $0.17.

LEAN HOGS

Stability developed in lean hog futures Wednesday ($0.47 lower to $0.17 higher) as traders moved away from strong recent market losses, in an attempt to bring buyers back into the market. April futures closed 5 cents lower at $63.62 per cwt, while May and June futures posted 17- and 5-cent-per-cwt gains respectively in an attempt to spark narrow commercial buyer support midweek. At this point, it is premature to draw underlying support from cash market activity, but even light underlying gains in pork values may help to rekindle buying activity in what is likely to have been an oversold lean hog complex over the last three weeks. Potential buyer support may continue to develop over the near futures, moving into both nearby and deferred contracts. Carcass values are lower. Sharp losses in most primals were offset with Bellies being the only market posting a gain Wednesday. Pork cut-out: $74.87 down $0.63. CME cash lean index for 4/3: $67.07, down $0.52. DTN Projected lean index for 4/4: $66.60, down $0.47.

THURSDAY’S CASH HOG CALL

Steady to $1 lower. Packers continue to return each morning with the same mantra, and this continues to get business done day after day. Bids of steady to $1 lower are expected to be the general range once again, though most prices are likely to be seen steady to weak by the time the morning is over Thursday. The overall light expectation of trade Saturday has more to do with packers’ ability to keep their hand on the throttle than anything else throughout the industry at this point. Packer runs Thursday are pegged at 441,000 head, with 83,000 scheduled on Saturday.

Moderate to firm losses developed through the entire livestock market as traders continue to focus on building pressure in nearby live cattle and feeder cattle contracts. This is adding to uncertainty in the complex with fundamental softness seen in all meat values during early April. Corn prices are higher in light trade. May corn futures are 3/4 cent higher. Stock markets are higher in light trade. The Dow Jones is 145 points higher while Nasdaq is up 32 points.

LIVE CATTLE:

Light to moderate pressure is seen across live cattle trade Wednesday morning with the focus on apathy in cash market movement and mixed trade through cutout values. Strong pressure in feeder cattle futures continues to be the main driver in front month losses in April live cattle pressure as traders continue to focus on the lack of commercial market support heading into the spring and summer season. The potential that additional cash market pressure may quickly develop in the weeks ahead may further weaken futures trade, leaving the entire market vulnerable. Cash cattle markets went untraded on the Fed Cattle Exchange Wednesday morning. The Fed Cattle Exchange Auction report today listed a total of 3,572 head for offer, none of which actually sold. I believe this is the first time since the Fed Cattle Exchange has traded that all cattle on the exchange have remained a “no-sale,” indicating that there is a clear distinction between the direction of packers’ and feeders’ market intentions at this point. Bids are starting to be seen in Nebraska and Kansas on a live basis at $122 to $124, but this is well below asking prices of $130 per cwt. Asking prices on dressed cattle are still seen at $210 per cwt. Active trade may be seen at the end of the week. Beef cut-outs at midday are mixed, $0.28 higher (select) and down $1.44 per cwt (choice) with active movement of 100 total loads reported (70 loads of choice cuts, 14 loads of select cuts, 5 loads of trimmings, 12 loads of ground beef).

FEEDER CATTLE:

Sharp triple-digit losses continue to hold in front-month April futures. This has now pushed April feeder cattle contracts below $130 per cwt for the first time in two weeks. The lack of support in the complex and retraction of the strong market rally continues to limit trader support through the entire cattle complex, but especially the feeder cattle market during early April. The rest of the feeder cattle market continues to casually follow the direction set by April contracts at this point, with very little change in this activity expected over the near future.

LEAN HOGS:

Light buyer support is slowly stepping back into nearby lean hog futures contracts at midday as stability through the morning has gotten its point across to the entire complex and seemingly brought additional commercial interest back to summer markets. Although prices may be able to move slightly higher, it is uncertain just how much additional price support may be able to move into the contracts at this point given the still weak fundamental pressure in the market. But the fact that lean hog prices are not on a fast track lower is creating some underlying support to the market and helping to bring buyers to the table. Cash prices are lower at midday on the National Direct morning cash hog report. The weighted average price fell $1.35 at $58.64 per cwt with the range from $55.00 to $60.50 on 3,020 head reported sold. The weighted average price fell $0.36 at $60.18 per cwt with the range from $56.00 to $60.50 on 250 head reported sold. Cash prices are lower on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 187 loads selling with prices falling $0.28 per cwt. Lean hog index for 4/3 is at $67.07 down $0.52 with a projected two-day index of $66.60 down $0.47.

Cattle buying interest could start to become somewhat more evident at midday, and we could also see greater definition in terms of country asking prices. Yet both sides are apt to stay mum until the results of the FCE auctions are known later Wednesday. Our guess is that significant trade volume will be delayed until Thursday or Friday. Live and feeder futures are geared to open moderately lower, pressed by residual selling interest and ongoing problems in the wholesale beef trade.

It seems hog buyers will resume their procurement chores Wednesday with bids steady to $1 lower. Most analysts expected the Saturday hog kill to total close to 78,000 head. While that’s somewhat smaller than we’ve seen, it could be enough to cap a total weekly kill just under 2.3 million head. Lean hog contracts should remain on the defensive at midweek, checked by following selling and unhelpful fundamentals.

OTHER MARKET SENSITIVE NEWS

CATTLE: (PR Newswire Association) — The maker of America’s number one selling beef hot dog announced it has removed added nitrites and nitrates * from all Ball Park beef hot dogs, and eliminated by-products and added fillers from its meat line.

“Ball Park brand has always been about quality,” said Colleen Hall, director, Ball Park brand. “Wednesday, we’re taking the lead by removing artificial nitrites and nitrates and replacing them with natural alternatives, so people can feel even better when choosing Ball Park beef hot dogs. Consumers want more transparency when it comes to what’s in the food they eat, and we want them to know we’re listening.”

According to the National Hot Dog & Sausage Council, an estimated 20 billion hot dogs were consumed in the United States last year. During the core grilling season months, from Memorial Day to Labor Day, Americans typically consume seven billion hot dogs — which is 818 hot dogs consumed every second.

“The great taste of Ball Park brand hot dogs hasn’t changed,” said Hall. “We took special care to make sure everything consumers have come to love about our hot dogs stayed the same. We’re America’s number one beef hot dog for a reason, and taste tops the list.”

The Ball Park beef core portfolio of hot dogs are made with 100 percent beef and contain no artificial colors, flavors, by-products or fillers. *Except for those naturally occurring in the celery juice powder and sea salt.

HOGS: (farmersjournal.ie) — All meat plants caught up in the Brazilian meat scandal will not be able to export meat to Europe, the European Union has confirmed. Speaking before the Agriculture Council on Monday, EU Commissioner for Health and Food Safety Vytenis Andriukaitis said while it is “not up to us to detect fraud in Brazil”, the EU will enforce the highest food safety standards.

“All consignments from establishments under review will be rejected and returned to Brazil,” Commissioner Andriukaitis said.

He added that Brazil must be able to demonstrate the “reliability, predictably” of the food it exports to the EU.

Commissioner Andriukaitis said that an audit of food safety standards in Brazil is ongoing and he hopes to have it completed “after Easter but not before the middle of May”.

It is now over two weeks since Brazil was rocked by the revelations of Operation Weak Flesh.

On 16 March, some 1,000 police raided 30 companies in Brazil, including JBS, with accusations of rotten and dangerous meat having been sold and public officials bribed.

While Brazilian authorities have contained the scandal, domestic prices in the South American country have taken a hit in the past week.

Irish farmers are still waiting to see if prices here will receive a bounce on the back of the scandal.

Cash cattle trade remains undeveloped Tuesday afternoon with live bids developed in Nebraska at $124, although even these bids were few and far between through the day as cattle were to be delivered in the second half of April for this money. Asking prices are seen at $130 in the South and $210 in the North. It is expected that additional market clarity will develop Wednesday, although more activity may not be seen until it gets closer to the end of the week. According to the closing report, the national hog base is $0.30 lower compared with the Prior Day settlement ($55.00-$61.50, weighted average $60.01). The corn trade slipped lower in light activity. May futures posted a 4-cent loss Tuesday. The Dow Jones Index is 39 points higher with the Nasdaq up 4 points.

LIVE CATTLE

Strong nearby pressure developed across the live cattle trade, leaving the cattle markets under pressure ($0.22 to $1.40 per cwt lower) as traders try to deal with the lower cash markets and potential that seasonal highs may have been already met. This has created pressure Tuesday as April contracts have quickly faded away from $120 per cwt, and June contracts have started to back away from the $110-per-cwt price level. The ability for boxed beef values to show strong support in the morning report helped to bring some stability to the market midday, but was not enough to hold buyers to the market through the end of the trading session. Beef cut-outs: lower, $0.96 lower (select, $200.39) to down $1.74 (choice, $211.69) with light to moderate demand and moderate to heavy offerings (82 loads of choice cuts, 50 loads of select cuts, 10 loads of trimmings, 28 loads of coarse grinds).

WEDNESDAY’S CASH CATTLE CALL:

Steady to $2 lower. Early activity Wednesday is expected to remain quiet with asking prices redeveloped around $130 per cwt in the South and $210 in the North. It is possible that bids may become more defined, but not expected to be extremely available until late in the day.

FEEDER CATTLE

Feeder cattle futures remained mostly lower (steady to $2.05 lower) Tuesday with triple-digit losses quickly moving into the complex as April futures closed $2.05 per cwt lower. The break away from support levels of $136 per cwt seen last week has created additional long-term pressure through the market and continues to draw long-term liquidation through the entire cattle complex. Traders may look for additional pressure through the week, given the aggressive upward movement seen over the last month. CME cash feeder index: 4/3: $133.30, up $0.03.

LEAN HOGS

Lean hog futures turned lower ($0.07 to $1.12 lower) with triple-digit losses quickly developed through nearby lean hog futures at closing bell as April and May contracts futures tumbled lower in the last hour of trade following the inability for buyers to move back into the market and April contracts closed at $63.67 per cwt after a $1.12 loss. Summer 2017 contracts posted 20- to 30-cent losses, but also are trading at $72 to $73 per cwt, which has turned nearly $7 per cwt lower over the last two weeks. This lack of support in the entire complex has led the market looking for a bottom and the ability to step back into the market. Carcass values are lower. Sharp losses in bellies offset gains in all other primals. Pork cut-out: $75.50 down $0.39. CME cash lean index for 3/31: $67.59, down $0.61. DTN Projected lean index for 4/3: $67.07, down $0.57.

WEDNESDAY’S CASH HOG CALL

Steady to $1 lower. Eroding cash market support is expected to once again be seen through midweek with the continued pressure in futures trade developing uncertainty through the cash markets. Packer runs are steady through the week with 440,000 seen through the week, although end-of-the-week runs are expected to be sluggish with Saturday runs abbreviated with only 78,000 expected.

Cattle futures remain lower, but have pulled back from early losses with nearby feeder cattle futures under moderate to strong pressure. The sharp losses seen in front-month April live cattle trade may continue to limit long-term buyer support across the complex, but may not carry into fall contracts. Lean hog futures are holding mixed pressure, although the most aggressive losses are seen in nearby contracts. Corn prices are lower in light trade. May corn futures are 3 cents higher. Stock markets are higher in light trade. The Dow Jones is 3 points higher while Nasdaq is down 10 points.

LIVE CATTLE:

Moderate losses have developed at midday with traders looking for additional market support through the end of the session. Early triple-digit losses have been limited to losses moderate 60 to 70 cents with traders now focusing on a strong boxed beef market push, which is helping traders focus on the potential for market support and April live cattle trade moving back to $119 per cwt. This could bring additional focus back into the market and limit additional market direction later not only in the complex, but through the month of April. Cash cattle are untraded Tuesday morning, although bids have just started to develop in the North on a live basis at $124 per cwt. This may not start to bring additional activity into the complex over the next couple of days, but is starting the ball rolling. Asking prices are starting out at $130 live basis and $210 dressed basis. Beef cut-outs at midday are higher, $1.61 higher (select) and up $1.30 per cwt (choice) with light movement of 87 total loads reported (34 loads of choice cuts, 34 loads of select cuts, 4 loads of trimmings, 14 loads of ground beef).

FEEDER CATTLE:

Early losses in feeder cattle futures have now calmed slightly with triple-digit losses seen in all markets during the morning now only seen in front-month April futures. The strong support in beef values has not been able to bring some stability in the cattle market but it is uncertain if it will be enough to draw buyers back into the complex before the end of the session.

LEAN HOGS:

Firm pressure continues to develop in nearby lean hog futures trade as the focus remains on weakness in nearby market liquidation. April losses have added to the softness in the contracts and are trading at $64.40 per cwt. There continues to be additional pressure in June contracts. although the rest of the summer markets have not been able to stabilize at midday despite uncertainty in the rest of the trading session. There is additional market pressure through the rest of the complex, as traders are looking for direction from market fundamentals that may look for increased support from outside. Cash prices are unreported at midday on the National Direct morning cash hog report. Cash prices are unreported on the Iowa Minnesota Direct morning cash hog report. The National Pork Plant Report reported 192 loads selling with prices adding $1.41 per cwt. Lean hog index for 3/31 is at $67.07 down $0.71 with a projected two-day index of $67.07 down $0.52.

We expect the cash cattle market to remain completely grounded today with both bids and asking prices poorly defined. Our guess is that feedlot managers will start out pricing ready steers and heifers around $130 in the South and $210 plus in the North. Yet the likelihood of serious business should be delayed until at least Wednesday or Thursday. Live and feeder futures should open on a mixed note thanks to a slow combo of short covering and long liquidation.

As long as market hog numbers remain plentiful and wholesale pork prices less than robust, packers will stick with defensive country bids. Look for early business this morning to be steady to $1 lower. Processing margins are moderate, but plentiful numbers pretty much allow procurement efforts to coast. Lean futures seem staged to begin with mixed prices tied to light bear spending and profit taking.

OTHER MARKET SENSITIVE NEWS

CATTLE: (CNBC) — Wendy’s is embroiled in a battle over fresh beef

patties after the fast food chain came after McDonald’s on Twitter.

McDonald’s announced in a tweet that it would use fresh beef in its

Quarter Pounder burgers in most of its restaurants by mid-2018.

Wendy’s tweeted in response: “So you’ll still use frozen beef in MOST

of your burgers in ALL of your restaurants? Asking for a friend.”

Wendy’s CEO Todd Penegor said Monday that the fast food chain is

being a “challenger with charm” and is simply defending its territory.

“If you think about our brand, right, we have been created on fresh

never frozen North American beef since 1969,” Penegor said on CNBC’s

“Power Lunch.” “We have been serving fresh beef in all of our

restaurants in all of our hamburgers for almost 48 years.”

Credit Suisse analysts Jason West and Jordy Winslow said the push

by McDonald’s into the fresh beef territory could improve the

company’s same-store sales. They said 15 percent of those gains could

be snatched from Wendy’s, thus hurting the fast food chain’s

same-store sales by 30 basis points.

Penegor said he is not worried. He said he sees his rival’s

announcement as a chance to allow more customers to recognize them as

the originals in the fresh beef patty space.

“Today about 3 in 10 consumers really understand that Wendy’s is

fresh never frozen,” Penegor said. “We have a great opportunity to

amplify that message.”

HOGS: (Taiwan News) — Food safety and the rights of local farmers

are important considerations for determining whether to participate in

international trade deals, Taiwan’s government stated Saturday in

response to a U.S. report urging the country to fully open its market

to U.S. beef and pork.

In the report by U.S. Trade Representative (USTR) released

yesterday, the United States said it will continue to urge Taiwan to

remove its ban on U.S. pork and beef products .

The 500-page report, which devoted eight pages to Taiwan, stated

the nation’s agricultural policies as serious concerns, while noting

the U.S. sees it as a key priority to keep pushing Taiwan to open its

market fully to its beef and pork imports.

In response, Presidential Office spokesman Alex Huang said Saturday

that the government would consider taking part in international trade

deals under the premise that the nation’s food safety and the rights

of the local farmers are protected.

The imports of U.S. beef and pork is a controversial issue in

Taiwan-U.S. relations, as Taiwan has been insistent on barring meat

products from the U.S. that contain traces of the leanness-enhancing

veterinary drug ractopamine on account of its potential health

hazards.

In terms of food management, the government will conduct risk

assessments based on scientific evidence and international

regulations, in order to ensure food safety in the country, said the

spokesman, adding that the nation is keen to proceed further with the

U.S. on bilateral trade cooperation.

The government will continue in its efforts to move toward

constructing a win-win situation for both nations, said Huang.

Cattle buyers limited early week efforts to the collection of new showlists. Generally speaking, the initial April offering looks larger than last week with only Colorado yards showing a few more ready steers and heifers. According to the closing report, the national hog base is $1.09 lower ($56.00-$62.00, weighted average $60.31). Corn futures closed 3-4 cents higher, supported by follow-through buying tied to Friday’s bullish reversal and smaller-than-expected planting intentions. The stock market closed lower with the Dow off 13 points and the Nasdaq down by 17.

LIVE CATTLE

Live cattle futures settled with uneven prices (i.e., up 27 to off 52). April and June seemed to attract the most selling interest thanks to bear-spreading interest, long liquidation, and signs of struggling beef demand. Beef cut-outs: sharply 9 lower, off $0.69 (choice, $213.43) to $2.65 (select, $201.35) with light to moderate demand and moderate offerings (47 loads of choice cuts, 34 loads of select cuts, 7 loads of trimmings, 15 loads of coarse grinds).

TUESDAY’S CASH CATTLE CALL:

Steady to $2 lower. Tuesday is expected to be typically quiet with both bids and asking prices poorly defined.

FEEDER CATTLE

At the conclusion of a choppy session, feeder futures closed with mixed prices, ranging from 50 higher to 90 lower. Front-end issues lost ground to the far deferreds. On an estimated run of 6,500 head (near steady with both last week and last year), Oklahoma City sold most feeder steers and heifers $1-$3 lower. However, steers weighing 900-1000 pounds were marked $2 higher. CME cash feeder index: 03/31: $133.33 up $0.56.

LEAN HOGS

Lean futures closed substantially lower to kick off the week with summer issues catching most of the heat. Prices settled generally 32 to 130 lower with June through August losing ground to both nearbys and far deferreds. In dipping back toward the lows of last week, the trade seems to be expressing worry over whether or not pork demand will be adequate enough to handle the production tonnage potential implied by the March 1 inventory. The carcass value closed moderately higher with all primals appreciating except the picnic and ham. Pork cut-out: $75.89, up $0.49. CME cash lean index for 03/30: $68.30, off $0.56 (DTN Projected lean index for 03/31: $67.59, off $0.71).

TUESDAY’S CASH HOG CALL

Steady to $1 lower. Hog buyers seem likely to remain on the defensive in the morning, generally armed with bids steady to a buck lower.