Cash cattle trade remains undeveloped going into Friday morning with limited bids seen during the week in most areas. The late-week development of cash interest is not shocking or unusual, but the fact that overall interest has been so light this week is somewhat surprising. The trend over the last two months is that at least a portion of trade, especially in the South, traded earlier in the week. Not only has early trade not developed, but bids have been hard to find in some areas. Packers are expected to still need additional cattle, which should spark increased packer interest through the day. Asking prices are holding from early-week levels, and unlikely to shift significantly until late in the day. Live cattle futures are expected to be mixed in a narrow range once again. The underlying support in the complex continues to focus on firm market levels through the end of the year, but any upward movement in the market is expected to be limited by narrow price shifts through the end of the week.
Firm pressure is likely to redevelop Friday morning in lean hog trade. The break from sharp and steady gains over the last couple of weeks has allowed for active pressure in nearby contracts Thursday. This is not seen as a shift in market direction, or any new bearish market news sweeping through the complex but is focused on the ability for traders to adjust positions following a generally unchecked market swing during the month of July. Cash bids are expected $1 to $2 per cwt higher with most bids $1 higher. Expected slaughter Friday is at 464,000 head. Saturday runs are expected at 9,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) |
Firm underlying support remains in live cattle futures, sparking expectations of light-to-moderate support through the end of the week. Even though aggressive price moves have not developed, the steady but consistent buyer activity the last two weeks is adding security to the recent market rally.
| 1) |
The lack of aggressive continued buyer support moving into cattle futures is creating concerns that any market rally may stall out at the current levels. This would establish a short-term market top, and create a sideways market pattern that could hold through much of the summer and early fall.
|
| 2) |
Cash markets are expected to firm due to the increased resolve of feedlot managers during the week, as they hold to aggressive asking prices. The consistent support in live cattle futures and continued steady demand is helping focus on steady -to-higher cash cattle trade Friday.
| 2) |
Beef values have struggled to find market stability over the last couple of weeks. The lack of underlying support in beef cuts is concerning to the entire complex, and could quickly erode recent futures and cash market support, which has developed during early July.
|
| 3) |
Lean hog futures continue to hold a strong market rally through the month of July. October contracts remain $10 per cwt higher since summer lows developed in early July, even following Thursday's $2.20 per cwt market loss. This is expected to remain bullish through the end of the month.
| 3) |
Sharp losses Thursday has created concerns that additional sharp pressure may continue to develop through the end of the week. If additional triple-digit losses sweep through the market Friday, weaker market tones are likely early next week.
|
| 4) |
Aggressive gains have again developed in wholesale pork values. This followed renewed support in belly cuts, coming from bacon demand and traditional summer buying activity for pork products.
| 4) |
Even though trade talks with China are planned for next week, there is limited optimism in the market that any meaningful direction or decisions will come out of this round of talks. The expectation that a resolution may be a long way off, is creating concerns that pork export demand may remain subdued.
|
 |
| #completeherdhealth |
No comments:
Post a Comment