Light to moderate activity is expected to be seen through the cattle complex early Monday morning with follow through pressure slowly developing across the complex as traders remain focused on the longer term activity through not only livestock trade, but all commodity markets. Cash cattle interest is likely to remain sluggish and nearly nonexistent through most of the complex with traders looking for additional support from seasonal buying activity in beef markets, but the focus in cash trade on show list distribution and inventory taking. The moderate activity that developed late in the week is likely to add some additional fuel to the fire, but may be hard to draw additional interest into the market until late in the week once again.
Lean hog futures continue to chop around in a narrow sideways trading range over the last couple of weeks with prices showing limited activity and price movement through the end of last week. Cash hog trade is expected to remain 50 cents lower to $1 per cwt higher with most bids expected steady to $1 per cwt higher early in the week. The focus on outside market moves and continued strong pork and hog supplies continues to be the main driver in the most recent market shift which has been unable to break out of the trading range in the last few days.
| BULL SIDE | BEAR SIDE | ||
| 1) | The inability for active cash cattle trade to develop in the North late last week is expected to leave packers short bought once again. This could help to draw additional longer term support back into the market which may bring additional activity into not only cash trade, but also help support futures activity in the coming days. | 1) | Firm support in southern cash cattle trade last week was unable to spill over to Northern activity with prices slipping $1 per cwt lower Friday from the previous levels. This could limit underlying support through the complex. |
| 2) | Beef cutout values continue to gain overall market support with traders looking for additional buyer interest and could spark some underlying support through the complex. There is growing support as temperatures finally heat up during the spring which is expected to draw additional demand for beef values after many people try to start the grilling season following the long and persistent winter. | 2) | Overall movement in beef values is expected to remain choppy at best with the concern of recent pullback in beef exports potentially drawing limited activity into the market through the first half of the week. |
| 3) | Firm follow-through support is expected to be seen in cash hog values with packers still looking to move additional hogs through plants. This may bring some additional underlying support to all hog markets through early week trade. | 3) | Pork cutout values eroded late last week, limiting the focus on building market direction through the next few days or weeks. This could create additional underlying concern through the entire hog complex. |
| 4) | Light but steady buyer support is starting to develop in lean hog futures trade. The ability to add some needed stability through the end of last week is likely to help bring some underlying support back to the table over the coming days. | 4) | Recent firm support through the grain complex is adding additional production cost to the hog market. This continues to remain a consistent pressure through the entire livestock market and most quickly is indicated in hog margins. |
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