Cash cattle interest is expected to remain sluggish most of the day Tuesday with bids and asking prices still undeveloped at this point. It is likely that additional interest will slowly trickle into the complex midweek. The potential for early-week trade on Wednesday for the fourth week in a row is actually pretty good this week due to Friday being a market holiday with both sides being willing to wrap up cash business early this week. Futures trade is expected to remain generally sluggish Tuesday following slow but steady market firmness the past couple trading sessions. Even though the market remains stuck in the wide sideways trend, the focus on current supplies and the ability to meet growing seasonal beef demand is likely to help keep buyers interested through April, although at most times not overly aggressive.
The hog complex still has so many unknowns that are keeping traders uneasy, but optimistic given the potential shift in market demand that some of these unknowns can bring to the entire industry. With African swine fever still a major threat to not only China pork production, but production in many areas of Asia and some sections of Europe, it is unclear just how much pork will be needed to fill current demand, and how quickly herds can be repopulated in many of these areas. The trade deal with China continues to be on most traders' minds, as it is uncertain when a deal will be agreed upon, and what that deal will look like for pork products. Even though these issues continue to focus on export demand and moving U.S. pork around the world, it is important not to forget that overall pork demand continues to strengthen domestically, which is helping to add even more firmness to the complex. Cash trade is called $1 lower to $1 higher Tuesday morning with most bids steady to 50 cents higher. Expected slaughter Tuesday is at 456,000 head.
| BULL SIDE | BEAR SIDE |
| 1) Strong gains quickly moved into beef cutout values early in the week with Choice cuts gaining $2.23 per cwt, moving prices above $230 per cwt. | 1) Early cattle on feed estimates expect total marketing's to decrease by over 3% from year-ago levels. Much of these delays are weather related as the winter storms and flooding have significantly disrupted rate of gains, putting cattle behind schedule through the spring. |
| 2) Despite the overall lack of intensity in live cattle trade compared to volatile hog markets, June live cattle futures have rallied $1.50 per cwt in less than a week as commercial buyer support is redeveloping through the complex. | 2) Limited interest is expected early in cash cattle markets, which may lead to sluggish movement this week and potential steady to lower cash prices. |
| 3) Wholesale pork prices have posted triple-digit rallies each of the last two trading days. This is sparking additional follow-through support from recent sales to China last week that are finally working through the system. | 3) The inability to spark strong cash hog price gains last week while futures and pork cutout values have rallied is creating additional underlying concern through the entire complex. |
| 4) Strong gains developed in deferred lean hog futures Monday as traders continue to focus on the long-term impact to pork prices that renewed buying from China could have on the entire industry. | 4) Limited interest in nearby lean hog trade Monday is creating the expectation that a moderate pullback may be developing through the holiday-shortened trading week. Due to expected limited volume during the week, wide price shifts may quickly develop. |
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