Cash cattle trade bounced higher Friday afternoon with additional trade in the North developing after the Cattle on Feed report posted lower-than-expected numbers. Live cattle prices sold $1 to $2 per cwt higher than the week previous week with dressed cattle sales $5 per cwt higher than the previous week. Early week cash cattle market information is expected to remain sluggish with showlist distribution and inventory taking the main focus early Monday morning. This may limit additional cash market interest until midweek or later and will take the direction of beef values and futures trade over the next couple of days into account in order to secure additional upward momentum. The question still remaining in live cattle and feeder cattle trade is just how much of the cattle placement and overall on-feed reductions have already been factored into the complex through the last half of last week. Initial market support is expected Monday, which may help to spark some underlying support, but the depth of buyer interest and ability to hold these gains through the week remains more uncertain. Cattle slaughter is expected to at 117,000 head Monday.
Mixed trade is expected early Monday as traders continue to balance the weaker close Friday surrounding news that the Chinese delegation ended its stay early without making planned farm visits. The late-week uncertainty surrounding the ability to make positive concessions in front of upcoming trade talks sparked widespread losses late Friday. Traders still continue to focus on the overall growing global demand for pork due to African swine fever issues in China and other countries. This will continue to remain bullish for overall pork exports even if the Chinese market remains generally off limits to U.S. pork supplies. October lean hog futures continue to defend $60 per cwt price levels, and the ability to hold levels above this threshold through the end of the month should spark additional underlying support. Expected slaughter Monday is at 478,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) |
Cattle on feed numbers remain bullish with feeder cattle placements well under pre-report expectations. This continued shift of year-over-year reductions in placements is leaving less supplies in feedlots, tightening beef supplies in early 2020.
| 1) |
Total cattle placed in feedlots is the highest month-over-month level in three months. Although this move remains seasonal, it also indicates that spring calves have already started moving into feedlots during the month of August.
|
| 2) |
Total cattle in feedlots fell under 11 million head for the first time in 2019. This continues to confirm that supplies continue to tighten and market-ready cattle should start to slow over the next several weeks.
| 2) |
Uncertainty of just how much of the expected cattle on feed price support has already been factored into the complex may limit early follow-through support during the week. Feeder cattle futures have rallied over $13 per cwt in the last five weeks, potentially curbing further upside movement.
|
| 3) |
Pork values have stabilized over the last week, helping to put increased focus on the overall long-term demand for pork in domestic and export markets.
| 3) |
Sharp late-week losses open the door for additional building pressure based on uncertainty of trade deal specifics and a hardline approach by both sides ahead of upcoming trade talks.
|
| 4) |
Additional cases of African swine fever reported in South Korea once again indicates that controlling this disease is far from over. This will continue to impact global pork supplies over the long term, allowing our pork to meet the needs of the growing global demand.
| 4) | The continued resolve for China not to import significant pork supplies from the U.S. continues to be evident even with the country stating that it will need to increase its exports in order to make up for the production losses within the country. This could essentially limit upside market potential for pork through the end of the year. |
 |
| #completeherdhealth |
No comments:
Post a Comment