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DTN Midday Livestock Comments          02/23 11:33

   Livestock Prices Higher Early 

   Livestock prices were off to another bullish start Friday and holding early 
gains so far while cash cattle trade remains light ahead of Friday afternoon's 
on-feed report. 

Todd Hultman
DTN Lead Analyst


   April live cattle, feeders and lean hog prices were all trading higher early 
Friday with feeders showing the strongest percentage gains. Friday's USDA 
report is expected to show 11.72 million head of cattle on feed.


   Back from Thursday's lower close, April live cattle futures are trading up 
$.95 at $187.50, still near their highest prices in four months, while the 
outlook for available cattle supplies remains limited in 2024 and everyone 
knows it. No significant cash trade has been reported yet as bids remain 
cautious ahead of Friday afternoon's on-feed report. Dow Jones' survey is 
expecting January placements to be down 13% from a year ago and 11.72 million 
head of cattle on feed on February 11, up slightly from a year ago, but down 
214,000 from a month ago.

   So far in 2024, the demand for beef appears to be going well as boxed beef 
prices have improved significantly since early January. Friday morning's USDA 
report showed choice boxed beef at $301.21, up over $5 on the week, while 
selects were up at $287.42 with a total load count of 79. Dow Jones estimated 
Friday's slaughter at 117,000, up from 116,000 a week ago. Thursday's dressed 
weights averaged 912 pounds for steers, up $3 on the week, and 830 pounds for 
heifers, down 3 pounds on the week. Friday's temperatures will range from the 
low 40s in South Dakota to the 70s in Texas with even warmer temperatures 
expected early next week. On Friday, USDA said 12,600 metric tons (mt) of beef 
were sold for export last week with Japan and South Korea named as top buyers. 
Early in 2024, beef exports are down 7% from a year ago.


   April feeder cattle are trading up $2.02 at $258.72, staying near their 
highest prices in four months while waiting to hear more about this week's cash 
trade. The rebound from early December continues to push prices higher as 
everyone knows calves are in short supply in 2024. So far, there hasn't been 
much evidence that beef cows are being held back from slaughter yet. Thursday's 
U.S. Drought Monitor shows much less drought throughout the western Plains than 
a year ago and pastures should have better conditions in early 2024. There are 
some dry conditions in western Montana and smaller parts of the Plains, but 
overall, conditions look favorable for new calves and DTN is expecting more 
precipitation in March. The latest CME feeder index price of $244.49 is from 
Wednesday and is down 44 cents from a week ago. Technically speaking, April 
feeders have recovered much of their fourth-quarter loss and are trending 
higher again with noncommercials net long 3,333 contracts as of Feb. 13.


   April lean hogs are trading up $0.62 at $87.82, extending Thursday's new 
seven-month high with ongoing signs of increased demand coming back to the pork 
market. In the last six months of 2023, negotiated cash hog prices collapsed 
from over $100 to just below $44 and they trailed formula prices by as much as 
$21 at the end of the year. As of Friday morning, USDA reported negotiated cash 
hogs at $71.59, down from Thursday and $7.08 below the swine formula quote of 
$78.68. Even so, packers are clearly more interested in bidding for negotiated 
supply than they were in late 2023 and that is a bullish sign of increased 
demand for hogs.

   Friday morning's report of pork cutout values was up 37 cents at $92.26 on 
209.90 loads. Cutouts were also up $1.69 for the week with one afternoon report 
to go. Friday morning's slightly higher cutout included a $10.03 drop in 
bellies and a $9.80 gain on picnics. CME's most recent lean hog index was 
projected at $79.10 for Feb. 22. Technically speaking, April hog prices are 
clearly trending higher and it will be interesting to see if prices eventually 
challenge major resistance at $91.60, the 2023 high.

   Earlier Friday, USDA said 28,900 mt of pork were sold for export last week, 
thanks to leading purchases from Mexico and Japan. USDA also revised the 
previous week's pork sales from 71,900 mt to 33,736 mt, explaining that 38,164 
mt of sales reported for China and Mexico were in error. So far in 2024, pork 
exports are up 10% from a year ago. Dow Jones estimated Friday's hog slaughter 
at 485,000, down 1,000 from last week. Thursday's average weights showed 
barrows and gilts down 1 pound at 214 pounds, while sows gained 2 pounds to 300 

   Todd Hultman can be reached at Todd.Hultman@dtn.com.

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