Cash cattle activity remains at a standstill
going into Wednesday morning with packers and feedlot managers unwilling
to show their hand at this point. But with both sides betting on
getting business done by the end of the day, it is expected that
activity through the day will be much improved. Although asking prices
are still not easy to pin down, the expectation that most cattle will be
priced at $117 and higher live and $178 to $180 dressed. If deals
cannot be done by the end of the day, both sides will step back into the
market Friday, this could significantly disrupt Black Friday plans,
which may not bode well for price levels at that point. Futures trade is
expected to remain mixed to mostly steady early in the session as
traders seem unwilling to jump on the selling bandwagon following sharp
outside market losses. Trade through the rest of the week is expected to
remain sluggish.
In the hog trade, early bids Wednesday are
expected to remain in a similar range as earlier in the week with bids
$1 per cwt lower to $1 per cwt higher. Most bids are expected to remain
steady to weak with the recent market pressure in futures trade and
tumble in pork values weighing on packers intentions. With packers
schedules remaining light due to plants closed Thursday, the
availability of market-ready hogs will increase through the week.
Futures trade is expected to remain mixed in a moderate range with a
combination of follow-through selling met with short-covering stepping
into the market before the holiday break. Total slaughter schedules for
Wednesday are expected to be around 477,000 head. Saturday runs are
expected at 361,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) |
The Thanksgiving holiday on Thursday
will limit time packers and feedlot managers have to mull over cash
market activity. The need and desire to secure active trade before the
break is likely to stimulate increased buying activity given the
stability in futures trade.
|
1) |
Lack of support in boxed beef values
through the week has created questions of additional buyer support and
potential cash market strength not only in late November, but through
the end of the year.
|
| 2) |
Firm futures support has held in
nearby live cattle trade with front-month December contracts holding
firm above the $115 per cwt mark. This has moved over $1 per cwt higher
in the last week, helping to establish strong support levels at $114.50
per cwt.
|
2) |
Feeder cattle futures have continued
to lead the cattle complex lower as traders have broken away from the
direction of feed markets and overall production costs, and been heavily
influenced by outside market pressure.
|
| 3) |
Nearby lean hog futures have rallied
over $6 per cwt the last two weeks, breaking through short-term
resistance levels as traders focus on the potential for continued strong
demand through early 2019.
|
3) |
Aggressive outside market losses,
which pushed the Dow Jones Index down 551 points and falling well below
25,000 points, is starting to impact potential buyer support across lean
hog futures. This quickly pulled contracts off of recent market gains
Tuesday, and may continue to erode market activity the rest of the week.
|
| 4) |
Despite the sharp losses in lean hog
futures this week and tumble lower in pork cutout values, cash hog
values remain solid based on packers desire and need to gain access to
additional hogs and keep up with strong pork demand.
|
4) |
Sharp losses in pork primal cuts
Tuesday has adjusted overall trade direction and the potential for
market stability. Sharp losses of $11 per cwt were seen in belly cuts,
while most primals posted triple-digit losses. They pulled $3.09 off of
the pork cutout value, creating additional concerns moving into the rest
of the week.
|
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| #ccc |
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