Due to higher cash trade last week, feedlots are resolved to hold out for higher prices this week. Cattle futures tend to support that idea with August making a new high for the recent trend. Good packer margins may cause buyers to be a bit more willing to make sure business gets done even if it means paying a little more. Cash cattle trading is not expected to take place Tuesday. Mixed cutout prices do not provide much direction. Technically, the market is in an uptrend, but it is in overbought status, which could trigger some profit-taking.
Spread trading may have run its course with futures expected to settle down and trade more evenly. It seems the market is trying to establish an uptrend. August is now the front-month with traders more intent on following cash. News from China about African swine fever and any progress being made with exports has become old news with many traders not even reacting to any further news from that arena. Cash is expect to trade steady to $1.00 higher.
| BULL SIDE | BEAR SIDE | ||
| 1) |
August live cattle made a new high for this trend and after trading lower most of the day, futures were able to close slightly higher.
| 1) |
Futures are in overbought territory technically, which could trigger profit-taking from those holding long positions.
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| 2) |
Packers seem to be a little more willing to accomplish business this week, listing bids at steady to even slightly higher giving confidence for feedlots to hold out for higher prices.
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Beef cutouts are mixed, which does not indicate strong enough demand to tighten supplies. Without better demand, the sideway-to-higher trend may be difficult to maintain.
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| 3) |
Now that spread trading may have run its course for a time again, futures may settle down and collectively move higher.
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Hog futures are waiting for some catalyst to trigger buying interest. August and October contracts show more promise while later contracts are in a downtrend.
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| 4) |
Hog slaughter numbers may be finally slowing after large numbers have been showing up to the market for weeks.
| 4) |
Hogs continue to come forward for slaughter while demand remains mixed. Higher cutouts have been unsustainable for an extended duration, leaving the market floundering.
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| #completeherdhealth |
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