Cash cattle trade remains essentially
undeveloped going into Friday morning. The standoff between limited bids
the last few days and feedlot managers that are unwilling to part with
cattle at lower prices is setting the stage for what could be a late day
of trade. Light-to-moderate trade is expected to develop sometime
Friday in all areas, although overall market interest may remain
sluggish. Futures trade is expected to remain mixed in a narrow
direction early Friday with most of the focus on outside market factors.
Traders in all markets will be spending more time gaining information
on Hurricane Florence and the impact on the East Coast. This will likely
keep overall market activity light through most of the session.
Futures trade is expected to remain sluggish
through most of the session Friday. News stories and developments on the
impact of Hurricane Florence continues to gain more attention at this
point than any other market factor. This will likely keep most traders
focused on other issues, which could keep overall trade direction
stable. The uncertainty as to how this will impact the hog industry in
and around North Carolina as well as pork processors will have a big
impact on the overall movement of hog trade through the next few days.
But for most of the Friday trading session, it is likely to be too early
to tell just what impact this will have short and long term. Even
though the hurricane has been downgraded to a Category 1 storm, it still
is expected to cause major disruptions through the areas. Cash hog
values are expected to shift higher with increased support at the end of
the week.
| BULL SIDE | BEAR SIDE | ||
| 1) |
Futures trade has sparked firm
underlying support in early 2019 contract months with February through
June futures holding a firm market premium over spot-month contracts.
This indicates growing demand support expected as traders also focus on
the potential to tighten supply levels.
|
1) |
Live cattle futures pressured lower
Thursday, limiting the potential to break-through August resistance
levels of $112 per cwt. This threw the cattle complex back into the
sideways market trend through the entire summer with the potential that
prices may hover in this range over the near future.
|
| 2) |
Beef exports continue to improve,
with weekly export shipments 15,700 metric tons ahead of the previous
week. This continues to focus on active movement of beef through early
fall months.
|
2) |
The inability to spark active cash
cattle trade until late in the week has caused some additional concerns
through the entire market. This may lead to increased overall pressure
late Friday.
|
| 3) |
Active buying in February lean hog futures continues to focus on expected strong demand through early 2019.
|
3) |
Hurricane Florence is expected to
keep pork plants on the eastern seaboard dark Friday and likely through
the end of the week. This has the potential to limit pork totals through
the month of September, depending on any long-term delays.
|
| 4) |
Strong buyer support in cash hog
values continues to drive underlying buyer support through the complex.
The most impacted is December and February futures, which gained
additional support Thursday.
|
4) |
Total weekly exports remained unchanged with the week previous, which is limiting overall pork product movements.
|
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