Cash cattle market activity continues to be undeveloped with the bids and asking prices in midweek leaving a wide gap between price levels. It is expected that more interest will develop through the morning, although trade may be delayed until Friday sometime. It is likely that both sides will try to accomplish needed business before late-day Friday as they desire to wrap things up early going into the long holiday weekend. Futures trade is expected to open steady to $1 higher with follow-through buyer support moving into the complex following the strong midweek rally. But there is concern as to just how much buyer interest there will be and if this will be able to hold prices higher through the morning.
Limited interest is seen in cash hog markets through the last half of the week with traders focusing on the pullback in pork values and generally weak market tone in the last week in all markets. Cash values are expected to be steady to $1 per cwt higher, although most bids are expected to be steady through Thursday morning. Futures trade is pegged to move moderately higher in early trade based on follow-through buyer support moving back into the complex. This may help to draw increased trade into the complex, which may spark some additional trade over the near future.
| BULL SIDE | BEAR SIDE | ||
| 1) | Triple-digit gains in cattle futures midweek has helped bring some additional longer-term market interest in the market. This is expected to continue to build momentum as additional commercial buyers appear willing to step back into the complex. | 1) | Cash cattle bids through the early part of the week have been unimpressive and continue to remain well below feedlot manager expectations. This could lead to additional underlying cash market pressure through the end of the week. |
| 2) |
Strong upcoming holiday demand is expected to move through themarket as the Memorial Day weekend quickly approaches. Increased grilling and travel activity traditionally helps beef demand.
| 2) | Trade is expected to remain sluggish over the next couple of trading sessions. With the long holiday weekend quickly approaching, additional buyer support will likely move out of the market until next week. |
| 3) | Seasonal pork clearance continues to remain supportive through the middle of May as additional increases in seasonal domestic demand of pork continue to help support most primal values. Increased buying is likely to develop following higher demand in all meat products through and after the Memorial Day holiday. | 3) | Lack of firm support in cash hog values created early-week pressure in the lean hog complex. It is uncertain if increased buying will develop before the end of the week due to the abbreviated processing schedules over the holiday weekend. |
| 4) | Strong underlying support quickly swept through lean hog values midweek. This has pulled prices off of recent market lows and could provide additional underlying support through the entire complex. | 4) | Despite the strong triple-digit rally Wednesday in nearby lean hog futures, the tone of the market remains weak following the recent price pullback over the last week. Spot month June futures continue to be nearly $3 per cwt below last week's highs, creating concern that follow-through pressure may be developing. |
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