Cash cattle activity continues to remain elusive early in the week with show lists generally smaller for the week and packers expected to remain short bought through the month of February. The adverse weather conditions seen over the last three weeks is expected to have significantly reduced overall rates of gain in many of the feedlot cattle. This is likely delaying the ability for these cattle to become ready for market by one to two weeks. Bids and asking prices are not expected to be seen through the morning, allowing for most trade to likely be pushed off until late in the week. Futures trade is expected firm Tuesday morning with follow-through buying developing. There is the potential for limited position taking to develop as traders try to adjust following reaching contract highs in most nearby contract months.
Cash hog markets remain stuck in the current lackluster pattern of packers offering steady money to $1 per cwt lower, with most bids seen steady to weak as they try to gain access to market-ready hogs. The combination of weather delays the last two weeks, and plants either dark or running on reduced schedules do to planned maintenance is reducing overall slaughter numbers and likely backing up market-ready hogs through the country. Futures trade remains generally weak, but with April contracts successfully defending contract lows Monday, there is expected to be some additional buyer support moving back into the complex. Slaughter runs are expected at 476,000 head Tuesday.
| BULL SIDE | BEAR SIDE |
| Firm gains returning to beef values and higher cash cattle spending last week is helping to solidify the firmer market trend seen through the last several trading sessions. | Stability in live cattle and feeder cattle markets at this high altitude seems to be uncertain at best. Three times over the last month, cattle markets quickly adjusted lower after reaching contract highs. Leaving the ability to continue upward questionable at best. |
| Nearby live cattle futures shifted higher, setting new contract highs Monday. This is expected to rekindle commercial and noncommercial spending alike through the last half of the month. | A swift turn lower in feeder cattle futures is just one sharp grain market rally away. The lack of optimism in grain trade has allowed for commercial traders to swiftly move into feeder cattle markets. |
| April lean hog futures closed higher Monday, defending contract lows of $58.32 per cwt seen in July 2018. The ability to hold support levels is likely to spark additional longer-term buyer activity. | Lean hog futures remain near long term support levels with very little fundamental support seen through the complex. Digging prices out of the current hole is going to be an uphill battle that takes several days and weeks of consistent buyer interest. |
| Triple-digit gains flooded through May through August contracts Monday afternoon with traders bouncing off long-term support levels. This is expected to solidify commercial buyer interest Tuesday. | Past history of holding early-week gains does not bode well for the continued support of lean hog-buying activity. This may create aggressive position taking over the next two days. |
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| #completecalfcare |
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