MORNING LIVESTOCK REPORT                    Thursday March 4, 2010

LEAN HOGS

Brief comment today as I'm running late. The pork market continues to look solid. Cash was higher yesterday and cash is called fully steady to firm for today and into next week. The cutout was higher, quoted up 1.39 at 75.35. Futures closed higher Wednesday on good volume and rising open interest. The funds continue moving into the market in a big way, open interest on yesterday's strong performance was up nearly 3,600 cars. Today, look for the uptrend to remain intact. I have no recommendations. News broke yesterday that Russia is ready to move back to our pork market "in a matter of days".

LIVE CATTLE

Live cattle futures edged higher on Wed which was in contrast to the sharp rally in lean hog futures. Still, technically, there's no sign of a top in cattle futures. Typically the market tops in late Feb and works lower during March. There's no cash steer trade yet with bids at 89 to 90 cents compared to asking prices closer to 94 cents. Two bits of fundamental caution are the fact that beef was lower yesterday, choice down .83 yet the kill was also down. The slowdown in the chain speed could be the first sign of a top. Regardless, the funds continue to assume new length, driving prices higher on rising open interest. Total OI was up 611 yesterday and stands record high at 320,817 contracts. I have my producers hedged mostly through April put options designed to provide protection in the event of a top yet leave the upside wide open. Look for a two sided trade with the market likely firm to higher early.

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