RENEWED BULL SPREADING LIKELY ON CATTLE REPORT

  Livestock analysts expect renewed bull
  spreading in live cattle futures following yesterday's USDA
  7-state cattle on feed report.
      The USDA reported high placements in February, which may
  weigh on back months of cattle futures. Meanwhile, continued
  strong marketings during the month will support the April
  contract.
      Contracts for June delivery forward could open 25 to 50
  cents lower while April will likely open about steady, analysts
  said.
      Cheap corn is still the main incentive for putting cattle
  on feed, according to Smith Barney livestock analyst Tom
  O'Hare. "They have no place to send the grain," he said.
      Strong daily fundamentals may add to nearby support while
  the current discount of deferred months to the cash market may
  offset much of the effect of the report, analysts said.
      "The cash market is strong and may overshadow the report,"
  said Robin Fuller, analyst for Agri Analysis. She added that
  even though placements came in above the average trade guess,
  many traders had expected high placements.
      Placements are not that negative, especially since the
  technical correction in June and August live cattle futures
  since last week, GH Miller analyst Jerry Gidel said.
      He said the current marketing posture will provide added
  support to the nearby month. Feedlot marketings have been
  running at a heavier than expected pace.
      Chuck Levitt, analyst for Shearson Lehman said that with
  the number of cattle on feed down five pct at the beginning of
  the year, a three pct decline in marketings was expected. But
  the report for January showed marketings at 101 pct of a year
  ago and in February marketings were at 100 pct, Levitt noted.
      "So far we haven't seen any decline in marketings. They
  (feedlot operators) are marketing more cattle than they had
  intended for the first quarter, which is a bullish
  development," Levitt said.
      Gidel also noted that marketings for the early part of
  March are running ahead of a year ago. Feedlots are not falling
  behind and are holding that 100 pct marketing pace.
  

