Cash cattle business is expected to remain sluggish through most of the day as packers and feeders start the process once again. The short holiday week will likely disrupt the overall routine during the week with both sides desiring to wrap business up by late Wednesday in order to enjoy the long holiday weekend. Light-to-moderate trade developed late last week with trade at $109 in the South, which is steady to $1 per cwt lower than the previous week, and prices steady to $2 per cwt lower across the North at $178 to $180 per cwt. The overall lack of price support is not unexpected given the overall lackluster interest by packers to aggressively source cattle at the end of June, and the expectation that overall buying appetites will remain subdued during the first week of July also. Futures is expected mixed in light to moderate trade. Firm pressure in nearby live cattle futures at the end of the month was offset by firm late-week interest in feeder cattle trade. Traders were not only adjusting month-end positions but were wrapping up second quarter activity, which led to limited market shifts Friday. Feeder cattle trade is expected to focus on grain market direction as the wide market swings from Friday will likely increase volatility during early July.
Hog traders are watching for trade direction and the potential impact of the announcement of a "cease fire" in the ongoing trade war with China. Following trade talks last week in Japan between the two countries, President Trump announced that a cease fire had been reached. Although it is still unclear what the timeline for additional talks will be, or if either side will be bringing anything new to the table following the souring of the process over the last few months. The fact that at least an agreement to continue the process is expected to be viewed bullish for overall markets, as traders rekindle hope of moving pork back into the Chinese market. The impact of last week's Hogs and Pigs report is still expected to spark some uncertainty, although traders try to assess what the rising overall inventory levels will do through the remainder of the year given export demand uncertainty still the main concern for most hog traders. Cash trade is called steady to $2 lower Monday morning with most bids $1 lower. Expected slaughter Monday is at 477,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) | Sharp end-of-the-week losses in new-crop corn futures following the bearish USDA crop report shaped aggressive buyer support in feeder cattle trade during the day Friday. This may help rekindle buyer interest through feeder cattle trade and deferred live cattle markets as traders try to focus on long-term feed costs. | 1) |
Late-week pressure in live cattle trade despite renewed interest in feeder cattle futures is putting even more emphasis on lackluster beef demand, even at subdued price levels. This may limit the ability for nearby contracts to break through short-term resistance levels set last week.
|
| 2) |
Longer-term support is expected to develop in live cattle futures with traders defending June lows. The potential for a breakout market shift during the first two weeks of July could spark additional firm market support and move prices quickly through resistance levels.
| 2) |
Trade activity is expected to remain sluggish during the holiday-shortened week. With the Fourth of July holiday landing on Thursday, trader interest is expected to remain spotty with many out of the market at some point in the week, extending the holiday weekend. This may limit overall trade interest and price direction.
|
| 3) |
Lean hog futures are expected to be heavily impacted by the announced trade war cease-fire. The expectation that this agreement will put more emphasis and urgency on the ability for the two sides to reach a long-term agreement is likely to stimulate hope of increased trade with China over the near future.
| 3) |
Continued focus on growing hog supplies during the remainder of the year is likely to limit upside market potential during early July. Traders remain focused on growing supplies of market-ready hogs while there is still growing uncertainty about short- and long-term export demand, even though progress has been announced in the trade war with China.
|
| 4) |
Active domestic pork movement is still expected in the near future with summer demand likely to spark overall product movement and potential market stability in the coming days and weeks.
| 4) |
The lack of specifics of longer-term direction in trade talks and the latest "cease-fire" between the two countries is expected to raise more questions than answers this week. Traders will continue to dig deeper to assess any short- and long-term market direction seen since the recent announcement.
|
 |
| #completecalfcare |
No comments:
Post a Comment