Cash cattle markets are expected to be quiet through the morning with packers and feeders assessing last week's higher trade. With prices moving to $128 live and $205 dressed, a $2 to $3 per cwt gain over the previous week, the expectations are strong going into the week. Showlist distribution and inventory should keep both sides busy through most of the day with bids and asking prices not expected to develop until midweek. Futures trade is expected to remain mixed as traders continue to focus on nearby price levels near long-term resistance levels, but the ability to move above these levels has been elusive so far. Light early trade is expected through the morning as traders test the potential to run markets higher once again early in the week based on recent cash and wholesale beef values.
Limited market changes are expected in cash hog values early in the week with Monday's bids starting out steady to $1 per cwt once again. Given the support at the end of February, most bids are expected to remain steady to weak, providing limited underlying support. Futures trade is expected mixed-to-moderately higher with traders focusing on the potential to further distance themselves from long-term support levels, thanks to late-week buying through the end of February. This is helping to solidify additional commercial interest and the ability to gain attention as traders hold April prices above $56 per cwt. Monday slaughter runs are expected at 470,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) | Strong gains in cash cattle trade developed Friday. This is expected to increase expectations through the month of March. | 1) |
Intense cold weather conditions in much of cattle country are not only severely impacting feedlot conditions, but this late-winter blast is also in the middle of calving in many areas. This is likely to increase calf losses, which will have a long-term impact on the market.
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| 2) |
Strong triple-digit gains ended the week in beef cutout markets with Choice cuts moving above $220 per cwt as traders focus on underlying market support developing through the spring and summer months.
| 2) | The inability for April contracts to break through the $130 per cwt ceiling is causing significant caution through the entire complex, potentially indicating that the market has topped out, as traders look for a potential reversal. |
| 3) | Firm underlying support in nearby lean hog futures late last week is helping to spark additional underlying buyer interest through the entire complex. | 3) | Pork demand continues to remain a constant concern given the availability of hogs in the system and pork already in storage. This bearish underlying fundamental picture could limit buyer support in futures trade for an extended time. |
| 4) |
Pork cutout values posted strong triple-digit gains. This posts a consecutive market shift higher Thursday and Friday in the cutout report, potentially breaking away from the up and down market shift from the last couple of weeks.
| 4) | Cold and snowy conditions are likely to hinder weekly processing schedules as subzero temperatures with significant wind chills will limit the movement of hogs to plants, as well as drifting conditions in some areas, keeping transportation on rural roads a challenge. |
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| #completecalfcare |
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