Cash cattle market activity is expected to remain sluggish early Tuesday morning with bids and asking prices undeveloped at this point. It is expected to be midweek or later before interest starts to be seen by packers, which will continue to limit overall direction through the complex until late in the week. Futures trade is expected to remain generally firm following the strong underlying support that flooded back into the market late last week. But the question of market activity will limit the overall to develop and sustain increased trade activity with traders looking for additional longer-term support through the end of the month.
Given the flooding issues seen across the East Coast following Florence, pork processing schedules continue to be reduced with the expectations that this will return to normal in the future, but not as quickly as some would like. Getting hogs to market continues, and moving from one area to another continues to be the main issue due to the flooding. This may continue through much of the week until flood waters recede. This will continue to put pressure on cash hog values with bids expected to be seen $1 lower to $1 per cwt higher. Most bids are expected steady early Tuesday, with an estimated processing schedule of 420,000 head. Futures trade is expected to be mixed early following the strong market pressure seen Monday. December contracts seem to have been establishing a $3 per cwt trading range, through the month of September, which could help to contain the market for the time being.
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| 1) |
Underlying futures market support continues to develop through the complex. This has continued to develop trade volume as prices shift higher..
| 1) |
Lackluster trade activity early in the week has created additional questions surrounding the ability to continue advancing live cattle futures during the next couple of weeks.
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| 2) |
Strong boxed beef values have continued to move into the complex. The developing support of fundamentals is sparking widespread market interest.
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The inability to develop active cash cattle trade in the South last week continues to focus on the lack of confidence that packers believe beef values can continue to move sharply higher through the near future.
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Cash hog values have surged sharply higher early in the week, with additional early week activity focusing on building support through the entire complex.
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Strong triple-digit losses seen early in the week has tested the ability to maintain recent market support. This may spark additional selling pressure and test short-term support levels.
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| 4) |
Triple-digit gains in most pork primal cuts Monday has rekindled the focus on strong pork fundamentals. This continues to help spark additional support through the month of September.
| 4) |
Hog processing schedules are expected to continue to remain reduced due to floodwaters through North Carolina. This will start to back up the overall market ready hog supply, likely putting pressure on cash hog prices through the rest of the month.
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