Limited activity is expected in the cash cattle markets with asking prices and bids still undeveloped, but likely to become more active as the day continues. The likelihood of trade before the end of the week is low given that both sides may stick to their positions unless there is a major shift in futures trade in the next couple of days. Futures trade is expected mixed in limited early trade with limited buying potentially stepping back into the nearby contracts in order to regain last week's losses. This may not test resistance levels or contract highs in the near future, but the strength in fundamentals and expected continued demand support is likely to help support overall beef demand.
Follow-through buying is expected to initially develop in lean hog futures as traders continue to distance price levels from recent market lows. This is helping to spark additional interest from commercial and noncommercial traders through early March despite continued concerns of large pork supplies in the system. Cash hog values are expected mixed in a limited range from 50 cents lower to 50 cents higher with most bids Wednesday morning expected steady. Wednesday slaughter runs are expected at 477,000 head. Saturday runs are expected at 184,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) | Early estimates of feeder cattle placements on Friday's Cattle on Feed report are hovering at 92% year-ago levels. This dip in placements through the month of January should help to firm nearby price levels based on limited cattle moving into yards. | 1) |
Cold weather and above average snow cover in many areas through early March will likely significantly delay pasture conditions in many areas. This will significantly impact cow/calf operators and young calves going to pasture through the spring.
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| 2) |
Firm buyer support in spot April live cattle trade Tuesday indicates the potential to keep recent losses limited, as traders may quickly move back into the complex in the next few trading sessions, potentially once again testing long-term highs.
| 2) | Limited interest in cash cattle trade midweek and a recent pullback in futures trade appears to be cooling the cash cattle market momentum that has been building through late February. This could allow packers to pick up additional needs without increasing spending significantly. |
| 3) | Active buying in deferred contracts is showing increased underlying support moving from just spot-month trade and through the entire complex. This uniformity is likely to help spark additional short-term gains through the rest of the week. | 3) | Continued uncertainty is still developing about export demand, and much of this surrounds potential trade deals with China. The lack of specifics and overall needs in China continues to keep targets illusive. |
| 4) |
Continued firmness is expected in pork values with prices likely to show steady-to-firm market gains in most primal pork cuts through the end of the week.
| 4) | Cash hog values have done a poor job in fo |
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| #completecalfcare |
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