Limited interest is expected to develop in early cash cattle markets with bids expected to start out in the similar pattern as Wednesday with bids of $122 live and $200 dressed. This is still not in the ballpark of what feeders will accept, likely allowing the back and forth to move into Friday without a major market disruption before then. Futures trade is expected generally weak with the pressure in the complex Wednesday creating limited interest of regaining early week support. But the sense of love in the air surrounding Valentine's Day is creating a hope that cupid can revive the market with firm gains stepping back into the complex. Even though active beef demand support is expected to continue to develop through spring months, the limited activity over the last couple of trading sessions is allowing for contracts to wander within a moderate trading range.
Underlying buyer support is expected to redevelop through the lean hog futures complex. This market activity is likely to be driven by summer buying activity. Although there still is more questions than answers surrounding trade deals and potential demand support in export markets, the general tone is starting to firm following the expanded market pressure seen through the year. With April futures slipping below $60 per cwt once again during the Wednesday session, there continues to be the pressure developing by the long term bearish trend to limit buyers back into the complex. Cash hog trade remains steady to weak with most bids steady to 50 cents lower through the morning. Slaughter runs are expected at 471,000 head Thursday. Saturday runs are expected at 206,000 head.
| BULL SIDE | BEAR SIDE |
| Live cattle futures continue to hold well above the 40-day moving average. Even given the current market pullback, the relationship to the moving average in previous downturns would indicate that prices are near technical support to spark renewed buyer activity within the next 30 to 50 cents per cwt. | The inability to sustain active buyer support at the top end of the trading range in live cattle trade is causing additional concerns. This is likely to allow markets to remain stuck shifting back and forth in the current market range. |
| Packers continue to remain extremely short-bought through the month of February. The combination of aggressive asking prices and reduced plant runs through the last week is putting even more emphasis on buying market ready cattle. This should help support cash trade at the end of the week. | Lack of consistency in boxed beef values through the last couple of weeks has added even more volatility to the complex. This is allowing for some additional longer-term uncertainty surrounding the potential moves for beef values during the spring and summer months. |
| Strong underlying support continues to develop in summer lean hog contracts. This is helping to spark firm market expectations in all lean hog trade with the expectation to draw renewed buyer interest through the end of the week. | Potential gains looming in grain trade is expected to limit the upward potential in nearby hog trade as traders continue to remain concerned about production costs associated with feed costs. |
| Cash hog markets have started to stabilize following a long shift lower over the last month. The continued weakness through the entire complex has limited additional market direction until now, allowing for limited support over the next couple of weeks. | As the March deadline quickly approaches when tariff levels with China are scheduled to move to higher levels, there still is no agreement between the two countries. This is causing underlying nervousness in all markets, but especially the pork complex, based on the expectation of demand that could move to China. |
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| #completeherdhealth |
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