Packer interest should start to show more early Friday with bids expected to be in similar ranges as the last couple of days, but the ability to gain access to cattle is likely to move prices steady with last week at the least, unless there's a major turnaround in futures trade. Early bids are expected to be at $122 live and $196 dressed, although asking prices will remain firmly higher at $126 to $128 live, and $200 and higher dressed. It may be late afternoon before the majority of cash market activity develops. Futures are expected mixed to firm with follow-through support stepping into both feeder cattle and live cattle trade. The possibility of end of the week position-squaring is likely to bring about moderately mixed trade at times on Friday.
Firm pressure is expected to continue through the lean hog trade until the end of the week, although given the downward price shift, and the fact that Fridays can sometimes break away from the general tone of the market due to end of the week positioning, there may be an attempt to cover short positions by some in the market. This may allow for mixed trade later in the session, even though the general tone of the market is expected to remain weaker heading into the weekend. Cash market activity is expected steady to $1 per cwt lower, although most bids are expected steady to 50 cents lower. Slaughter runs at the plant are likely to hit 465,000 head Friday, with an estimated Saturday run of 212,000 head.
| BULL SIDE | BEAR SIDE |
| 1) Feeder cattle futures have rallied $3 per cwt in April futures through the holiday-shortened week. This is setting the tone to spark additional commercial buyer support through the feeder cattle complex. | 1) Limited interest in cash cattle trade through the week is setting up for what could be a generally steady cash trend compared to last week. This may add even more uncertainty as the overall cash prices have been able to move significantly through the month of January. |
| 2)Even with no direction in cash cattle trade through the tail end of the week, beef cutout values have started to rebound. This is helping to instill positive market expectations through the end of January that additional fundamental support may develop. |
2) Strong gains in feeder cattle futures have been met with lackluster interest in the live cattle trade. The desire and focus on additional pressure developing through the end of the week in nearby live cattle trade is likely to limit end of the week price support.
|
| 3)Despite the pullback in pork cutout values, packer margins have started to improve through the end of the week. This may help to bring about increased overall support through the complex in the next couple of days. | 3) Sharp losses in pork cutout values have sparked additional fundamental concerns through the entire hog complex. Pork cutout values have fallen steadily through most of the week with prices eroding nearly $3.50 per cwt the last three days. |
| 4) Firm summer premiums continue to hold even with concerns about longer-term hog supplies and overall uneasiness concerning the ability to sustain strong pork demand. July futures continue to hold a $20 per cwt premium over spot-month February contracts. | 4)Cash market weakness is expected to develop Friday as packers try to limit spending and protect plant margins in light of falling lean hog futures trade and eroding pork values. This may lead to general weakness through the end of the week. |
 |
| #completecalfcare |
No comments:
Post a Comment