Cash cattle trade is expected to remain quiet with bids and asking prices undeveloped Tuesday morning. It is likely that active trade may happen until sometime Thursday or Friday. Bids may start to slowly develop midweek, but probably quiet until later in the week. Feeder cattle futures are expected to still carry a bullish tone through the first half of the week following a $3 per cwt rally in nearby contracts, pushing prices off of January lows. The firm support in live cattle trade through the entire month seems to be slowly bringing additional market interest back to the market. Despite the firm undertone in the complex, trade may actually remain mixed as traders focus on potential shifts in outside trade as the overall support may bring about positioning opportunities at the end of the month.
Cash hog bids are expected to redevelop steady to $1 per cwt lower early Tuesday morning with most bids 50 cents per cwt lower. The continued pressure in futures trade is adding even more weakness to the cash market as packers extensively focus on protecting margins and lowering out-of-pocket spending. Futures trade is expected to be mixed to mostly lower with the recent losses adding even more bearishness as traders expect more production gains through the summer months. This will put more pressure on pork demand growth, as traders focus on export market uncertainty. Slaughter runs at the plant are likely to hit 477,000 head Tuesday.
| BULL SIDE | BEAR SIDE |
| 1) Strong follow-through gains in feeder cattle trade early in the week has sparked increased buyer activity through all cattle markets. | 1) The arctic blast moving through the Midwest through the week is quickly eroding feedlot gains as feedlot managers focus more on maintaining health than feed conversions in these cold temperatures. |
| 2)Live cattle futures are nearing contract highs once again in nearby April contracts. A move to contract highs before the end of January could spark additional underlying support through the entire complex, stimulating additional buyer support across the complex. |
2) Firm gains in futures trade has had limited strength in beef cutout values at this point. The inability to shift beef prices higher in the next couple of days will likely limit the potential for continued buying activity in the futures market.
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| 3)Wholesale pork prices have shown support early in the week, helping to take the emphasis off pressure in futures and cash price moves. This has the potential to rebuild market activity through the next week, adding stability to the complex. | 3) Cash hog prices continue to shift lower as packers are limiting overall spending through the complex based on recent weakness across the entire complex. |
| 4) Packer schedules continue to remain aggressive, even though the recent weather issues have made transportation difficult, as well as cold temperatures challenging on plant equipment and facilities. The ability to sustain aggressive packer runs will limit the backlog of hogs through the spring and summer months. | 4) Misinformation on African swine fever, how it is spread, and who and what the disease impacts continues worldwide as well as in the U.S. This is likely impacting overall pork demand. |
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| #completecalfcare |
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