Limited morning interest is expected in cash cattle trade with bids and asking prices likely to develop through the day. Any early bids are expected to be token bids, just to put a foot on base and start the process, rather than actively gaining the attention of feeders at this point. It is likely that increased interest will develop through the day, which may spark some late-day trade, especially in the South. There is additional uncertainty surrounding the lack of aggressive support in boxed beef values during the week, which will limit the overall support in cash markets through the end of the month. Futures trade is expected mixed to mostly higher. The steady-to-firm buyer support last week in live cattle trade has been countered by choppy and wide-moving shifts in feeder cattle. The lack of consistency and focus on grain trade will once again limit early-morning volume in all cattle markets.
Sharp gains Tuesday in nearby lean hog futures have moved hog prices to the highest level since late May. The continued shift higher and increased distance from summer lows has created additional momentum not only in spot-traded futures, but all nearby contracts. Traders are focusing on firming fundamental support as domestic demand for pork is ramping up, helping to break away from the bearish market trend seen in June. With additional support in cash and pork values, follow-through gains should develop during the week. Cash bids are expected $1 to $2 per cwt higher with most bids 50 cents higher. Expected slaughter Wednesday is at 477,000 head. Saturday runs are expected at 9,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) |
Strong but steady gains in nearby live cattle futures have moved prices to three-month highs. This is sparking renewed bullish support through the entire complex with summer and fall contracts holding ground above $109 per cwt.
| 1) |
Feeder cattle futures remain volatile as outside markets and grain trade continues to add uncertainty to the complex, limiting nearby market support midweek.
|
| 2) |
Firm underlying support in futures trade is creating the expectation of steady-to-higher cash cattle trade at the end of the week. This is likely to spark renewed interest in beef values in the near future as well.
| 2) |
Despite the strong and steady support in live cattle trade, beef values have been unable to show significant support over the last week. The inability to shift wholesale beef values higher may limit the long-term support of the recent price rally.
|
| 3) |
Nearby lean hog futures have surged higher, with double-digit gains flooding the complex the last three weeks. The bullish technical support moving into the complex is likely to spark additional buying interest.
| 3) |
Given the recent market surge, lean hog futures have the potential for a strong and aggressive market correction. This could cause active pressure in nearby contracts, and if sustained, limit the upside market growth the next few weeks.
|
| 4) |
Strong gains in cash hog prices last week has elevated buying interest. Packers continue to increase spending in order to maintain plant capacity through the end of July.
| 4) |
Pork values were unable to shift higher Tuesday, creating some concerns that the recent price rally has been too much and too fast to become sustained. This could limit follow-through support and weaken plant margins through the end of July.
|
 |
| #completeherdhealth |
No comments:
Post a Comment