Interest in cash cattle activity is expected to slowly develop through the day, although bids and asking prices are likely to remain sluggish through most of the morning. Feeders have not shown their hand as of yet, which is expected to point to higher asking prices given recent cash market support and recent futures market gains. Active trade is likely to be pushed off until Thursday or Friday, as bids and asking prices will likely be wide apart most of the day Wednesday. Futures trade is expected mixed following the limited direction seen Tuesday. Traders remain focused on underlying market support, but with prices hovering at the top end of the trading range, a moderate market correction would not be out of line. This may bring some uncertainty over the near future in live cattle and feeder cattle markets.
Strong technical support is starting to redevelop in lean hog futures with April contracts closing above $60 per cwt Tuesday. This is expected to bring about increased buyer activity in all nearby contracts as traders continue to move back into the complex. The ability to hold long term support levels through midweek will be huge in sparking additional commercial and noncommercial buying to the table. Cash hog values are expected to remain stable to weak with most bids expected 50 cents lower. Slaughter runs are expected at 477,000 head Wednesday. Saturday runs are expected at 114,000 head.
| BULL SIDE | BEAR SIDE |
| Warming and more stable temperature patterns through the week will allow gains in feedlot cattle to get back on track following significant challenges over the past three weeks. | The recent market surge higher in live cattle futures has opened the door for moderate to strong market corrections to develop in the next couple of days. Nearby contracts could move nearly $1.50 per cwt lower before triggering any significant support levels. |
| Live cattle futures continue to hold near contract highs with limited weakness expected to be seen through the near future. Even if prices adjust lower, firm demand support is expected to spark underlying buyer interest. | Limited support in beef cutout values has created some additional concerns that traders are looking for uneven and volatile demand through the next couple of weeks. |
| After testing contract lows Monday, aggressive and active buying developed through the entire complex. This pushed April contracts over $2 per cwt above weekly lows, as traders start stepping back to the complex. | Aggressive cash hog buying seen Tuesday with 16,515 head reported on the afternoon National Direct Hog report may limit cash buying activity over the next few days. This may limit the potential for price stability in hog prices in the near future. |
| Packer schedules have returned to a normal pattern midweek with recent weather concerns and plant maintenance delays behind them. This will allow packers to move additional pork into freezers through the end of the week. | Renewed support in corn and soybean markets may limit the upward market potential of lean hog futures through the end of the month based on increased production costs. |
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| #completecalfcare |
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