Feeder cattle futures broke through technical support Tuesday with April contracts moving above early-March levels. The move to $147.80 per cwt is the highest contract price since November 2018 and may create additional underlying support through all cattle trade. Live cattle futures remain stuck in the current market range of $126 to $130 per cwt, but with April contracts moving above $129 per cwt Tuesday, the focus on underlying fundamental support could spark additional buying activity in the next couple of weeks. Cash trade remains undeveloped early Wednesday morning as bids are still unavailable while asking prices are likely to redevelop at $130 and higher live and $210 dressed. Active trade is likely to be pushed off until late in the week, with another Friday trade becoming a strong possibility.
Cash hog bids are expected to continue to surge higher following firm gains in cash trade early in the week as well as continued support in pork cutout values. Most bids are expected to be steady to $2 per cwt higher with most bids $1 to $2 per cwt higher. Futures trade is expected mixed with increased underlying support likely to redevelop through the last half of the week. Light trade activity is expected to develop through the morning with increased stability moving through the complex. Continued buyer support is expected to spark additional interest through the week. Follow-through buyer activity is likely to follow-through firm gains. Expected slaughter Wednesday is pegged at 474,000 head, Saturday runs are expected at 164,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) |
Strong buyer support in feeder cattle trade is sparking increased underlying support in all cattle markets, which may create renewed activity in nearby live cattle trade.
| 1) |
Lack of interest in cash cattle trade through the week is expected to continue to move additional interest through the rest of the week. This may limit follow-through price support in the next several days.
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| 2) |
Uncertainty concerning the amount of cattle affected in recent floods has sparked renewed buyer activity through the entire cattle complex, moving April contracts to four-month highs.
| 2) |
Despite strong support through the entire cattle complex, prices are expected to hit significant resistance as prices near long-term resistance levels of $130 per cwt. This may continue to spark sideways trade.
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| 3) |
Aggressive buyer support in pork cutout values has continued to bring stability and renewed support back to the lean hog complex.
| 3) |
Light-to-moderate pressure developed Tuesday with June futures leading the complex lower. This may create additional softness through the rest of the week.
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| 4) |
Strong cash buying activity is moving back into the complex with triple-digit gains developing each day this week. This is expected to spark follow-through packer buying.
| 4) | Uncertainty surrounding any trade deal with China is creating uneasiness the longer the process continues. Even though increased pork demand continues to build, lack of uncertainty about future deals hovers over the market. |
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| #completeherdhealth |
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