Limited trade is expected to develop Thursday in cash cattle, although packers are expected to become more aggressive as the day continues. Initial bids are expected to redevelop at $195 dressed basis, similar to midweek with early live bids likely to be around $122 per cwt. Asking prices remain firm at $125 and higher live and $200 and higher dressed. Friday trade is likely at this point unless there are wide shifts in futures trade. Futures are expected to remain sluggish early Thursday morning with light follow-through buyer support likely as traders continue to slowly advance price levels higher. Following contract highs set once again midweek in April and June contracts, the focus on additional market gains continues to develop.
Cash hog prices are steady to $1 per cwt lower with most bids steady to weak Thursday morning. Light trade is expected in all lean hog futures contracts with limited pressure likely to develop in most nearby contracts. The inability to hold onto gains Wednesday has sparked some additional market uncertainty with traders focusing on the concerns that may continue to move back into the market and overall lack of building support through the end of the month. With April contracts trading near $62 per cwt, at the lowest level since August, additional pressure may continue to develop based on concerns of growing pork supplies through the summer months. Slaughter runs at the plant are likely to still be reduced due to cold weather limiting transportation, at 405,000 head Thursday. With Saturday runs at 350,000 head.
| BULL SIDE | BEAR SIDE |
| 1) Strong support redeveloping in stock markets has pushed the Dow Jones Index above 25,000 points once again. This is the highest close since early December, and gaining 3,300 points from market lows a little over a month ago. | 1) The impact of the "Artic blast" experienced through most of the Midwest is still not fully known. Although this is expected to have significantly disrupted daily gains, but overall death loss is still not available to the market. |
| 2)Steady to strong futures buyer support continues to move into nearby contracts. With April and June contracts now both setting contract highs, the focus on follow-through buying activity is expected to develop. |
2)Pressure in feeder cattle trade is starting to focus on the potential for additional softness to develop based on firm grain market support. This may continue to add even more uncertainty to the entire complex.
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| 3)Deferred lean hog futures have continued to show market stability despite the firm pressure in nearby contracts. This could help to bring more support back to all trade, once traders move their focus off of summer supply issues. | 3) Market weakness has continued to pressure pork values. With aggressive losses in several primal cuts midweek, triple-digit losses were seen in the overall pork cutout value. |
| 4) Continued hope that trade negotiations with China will bring meaningful trade resolution to the pork industry and bring increased overall support is keeping some traders cautiously optimistic. | 4) Continued reduced packer runs are expected Thursday as the cold weather is limiting the amount of hogs that have been able to reach plants due to the cold weather. Although temperatures are expected to ease through the day, early shift production is expected to be limited in several plants. |
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| #completecalfcare |
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