Cash-cattle activity is expected to still remain sluggish through most of the day Wednesday, although packers are expected to show slightly more interest as the day continues. It is likely that active sales will be delayed until Thursday or Friday sometime. Futures are expected to remain mixed with the late-day support on Tuesday drawing some limited support, although the overall tone of the market remains firm following contracts moving through resistance levels.
Steady cash hog trade is expected early Wednesday, although bids are expected to range from $1 lower to $1 higher. The overall lack of follow-through buyer support in cash trade despite the recent surge in futures trade could limit overall market support. The mixed trade seen late Tuesday is expected to add additional market uncertainty through midweek, and prices will likely hover in a choppy but mixed trade through the rest of the week.
| BULL SIDE | BEAR SIDE | ||
| 1) |
Follow-through buyer support, which moved into nearby live cattle futures late Tuesday, is helping to spark some additional buyer support with October futures moving above resistance levels, as prices approach $114 per cwt in spot contracts.
| 1) |
The continued support higher in grain trade during early October and expectations of further support due to wet weather concerns is likely to add pressure to cattle markets as production costs are starting to inch higher.
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| 2) |
Feedlot managers are expected to hold onto the expectation of firm to higher cash cattle trade through the week, as they continue to pressure packers into higher cash prices.
| 2) |
Lack of aggressive trade for most of the trading session Tuesday is creating the expectation that most traders are content with current positions and will likely try to remain generally inactive through the near future.
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| 3) |
With October lean hog futures surging over $15 per cwt higher since late August, this is expected to add even more underlying support through the entire complex over the next couple of trading sessions.
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Pork prices slid lower Tuesday with strong triple-digit pressure in picnic markets. With the current supply levels and additional uncertainty about long-term demand due to export markets, pork prices are likely to remain choppy in a wide range.
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| 4) |
Active trade is expected in most nearby lean hog futures late Wednesday, as increased overall support may continue to develop based on potential stability in cash markets through the day.
| 4) |
December through April lean hog futures have found little support going into the midweek session, which may create a light to moderate pullback after initial gains on Monday.
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