Limited trade developed in the North late Friday, although the wait was worth it for feedlot managers as prices developed at $202 per cwt, $2 higher than the previous week. The lack of trade at these levels and abandoning trade in the South is clearly a concern going forward. There could be some spillover trade Monday in order to acquire enough cattle to keep plants full or near full through the week. For the most part, both sides will move to the routine task of collecting numbers with inventory-taking and showlist distribution in cattle country. Futures are expected mixed to mostly higher with follow-through support from late last week, as well as the firm cash market shift supporting futures trade.
Cash hog values are steady to $1 per cwt lower as traders return from the weekend and the latest round of winter weather. The weather conditions are expected to delay overall hog movements yet again, curtailing overall processing schedules early in the week. Futures are expected mixed in a choppy and generally unsettled trading range as traders are still focused on the uncertainty of last week's follow-through gains. The ability to hold prices above last week's low of $52.97 will be huge but will be the focus of many traders through the early part of the week. If recent lows can hold, traders will likely step back into the market, building on these support levels. Slaughter runs are expected at 455,000 head Monday.
| BULL SIDE | BEAR SIDE |
Beef in cold storage was listed at 495 million pounds, this is nearly 20 million pounds less than 2017 levels in the delayed Cold Storage report.
| Cattle in feedlots grew 2% during the month of December. This focus on growing supply will likely curb overall market expectations, although the delayed nature of the report is not expected to add much market action early Monday. |
Late-developing cash cattle trade in the North pushed prices $2 per cwt higher than the previous week. With cash markets at $202 per cwt, and packers remaining short-bought, the expectation for further gains is developing.
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The inability to actively trade cattle last week indicates that packers are willing to hold out and potentially cut overall plant output rather than actively continue to move prices higher. This could quickly change the direction of the market if packers continue to abstain from buying activities through the next couple of weeks.
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| Strong lean hog futures gains late last week is helping to distance price levels from recent levels. Trades are looking for increased volume to develop in order to build on recent market support. | Pork in cold storage increased 15 million tons from 2017 levels, in the delayed release of the reports. This reiterates the focus on growing pork supplies, which has remained under pressure the last few months. |
| Firm cash hog prices developed late last week, sparking increased underlying support expected to develop through the next couple of days. The need to gain access to market-ready hogs means packers have to spend more money. | Limited activity is expected in futures trade Monday morning. This is expected to add even more uncertainty to the direction of the market, which has wildly shifted higher and lower late last week. |
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| #completecalfcare |
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