Initial cattle activity Monday morning is expected to remain steady to moderately lower as traders work through the market impact of Thursday's Cattle on Feed report. The fact that traders had an extra day to process numbers and the potential impact to the market of the elevated March cattle placements may add additional volatility to the market. Feeder cattle placed in yards increased to 105% year-ago levels. This is 1.2% above early estimates, but within the market range. Some of the increased placement levels have likely been factored into both live cattle and feeder cattle trade, although the underlying tone at opening bell may be steady-to-weak Monday morning. Traders are also focusing on potential seasonal support to stimulate longer-term buying activity in the complex. Cash cattle trade is expected to remain sluggish following firming cash prices last week. Showlist distribution and inventory taking will likely be the extent of cash markets Monday.
Mixed trade is likely Monday morning as traders continue to struggle with short- and long-term market expectations. With active sales to China reported Thursday in the Export Sales report, the market seemed underwhelmed. This indicates that traders have already factored in moderate-to-large weekly sales, and if these sales do not continue on a weekly basis, it may quickly limit follow-through buyer interest. Limited interest may slowly develop as traders look for increased overall long-term direction now that the Easter holiday has passed and they can focus on normal spring and summer demand. Cash trade is called steady to $1 higher Monday morning with most bids steady. Expected slaughter Monday is at 344,000 head.
| BULL SIDE | BEAR SIDE |
| 1) Strong cash cattle trade last week pushed prices $2 to $3 per cwt higher going into the long weekend. This is likely to spark some underlying fundamental market support in the coming day. | 1) Increased feeder cattle placements in March was larger than expected. This is likely to create underlying pressure as traders focus on growing supplies in the summer months. |
| 2) Cattle marketed in March fractionally beat pre-report market estimates in the April 1 Cattle on Feed report. This may bring some additional stability to the market as traders focus on moving past spring weather challenges. | 2) Traders are looking for limited beef cutout support early in the week as limited long-term direction is expected, allowing markets to hover in the current sideways range the next few weeks. |
| 3) Active China sales were reported late last week in Thursday's Export Sales report. A total of 23,500 metric tons (mt) of pork was sold, pushing the two week total over 100,000 mt. This may spark some underlying support over the remainder of the month. | 3) Lean hog trade late last week remained disappointed by strong sales of pork to China. This indicates that traders seem to expect continued aggressive moves weekly, which may not be realistic. |
| 4) Firm cash hog support developed late last week, bringing additional buyer support back into the complex. This may add increased trade interest Monday. | 4) Pork cutout values eroded Friday even though overall trade volume remained light. This could continue to limit the underlying support in lean hog futures the last several weeks. |
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