Mixed trade is expected to redevelop early Friday morning across live cattle and feeder cattle markets. The initial market support during the early hours of trade over the past two days has helped to bring a sense of stability to the market, although price levels have been unable to hold early strong gains. The pressure in stock markets Thursday is adding additional concerns to the cattle market, which could limit additional longer-term demand support across the complex. Traders are looking for initial light trade, but the ability to hover within the recent trading ranges could help to spark some late-week buyer interest. Cash cattle trade remains undeveloped with bids and asking prices essentially unmoved over the last few days. Bids are expected to redevelop at $124 live and $196 to $198 dressed, but the gap between asking prices and bids will likely narrow quickly as deals need to be done before the end of the week. It could be afternoon Friday before any indication of cash cattle trade takes place.
Early pressure is expected to redevelop across lean hog trade following additional uncertainty in the complex. Mixed trade at closing bell was able to bring some stability to the market, although traders are unwilling to actively move into the market late in the week given the still weak undertone in the complex following sharp price tumbles over the last several days. Cash hog prices continue to shift lower with bids expected to be $1 to $2 per cwt lower Friday morning.
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| 1) |
The ability for feedlot managers to hold strong to early asking prices heading into Friday is creating a sense of stability and firmness in cash cattle markets, which is expected to continue through the session Friday. This could lead to the need for packers to significantly increase bids through the end of the day in order to gain access to needed cattle.
| 1) |
Sharp losses in the stock market Thursday has led additional longer-term concerns back into the cattle complex as traders remain focused on overall market uncertainty. The Dow Jones posted a 1,032 point loss late-day Thursday, creating widespread uncertainty in the market.
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| 2) |
Firmness in boxed beef levels have helped to bring additional buyer support to the market. Some additional focus is expected in outside markets, but the ability to continue to move beef product could sustain additional late-day support.
| 2) |
Cash cattle activity will once again move into the Friday session with no significant activity yet seen during the week. The standoff between packers and feeders points to a much deeper issue as each side continues to aggressively focus on the long-term direction of cash trade at this point in the spring. This could push trade to the end of the day, and if packers win this standoff, it could lead to weaker prices over the next several weeks.
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| 3) |
Strong market support in lean hog futures Thursday did not result in aggressive gains, but it quickly pulled markets away from the previous sharp losses seen early in the week. This sense of stability could help to spark late-week short-covering as the market remains extremely oversold at this point.
| 3) | Continued pressure in cash hog prices indicates that the overall weakness early in the week still has a major hold over the entire hog complex. This could lead to limited buyer support with a weak undertone holding through the market well into the end of the month. |
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Pork cutout values have started to stabilize slightly following the early-week market tumble. Even though moderate pressure is still developing in the overall cutout value, most primal cuts moved higher Thursday, indicating additional buyer support is redeveloping in pork markets.
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Increased volatility in outside and financial markets is not good for the entire pork complex. This creates questions of limited overall demand domestically as more and more buyers try to assess potential economic strength, and this could significantly disrupt export market activity and cause additional pressure through the entire complex.
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