The futures price rally Wednesday was not supported by higher cut-outs. October and December live cattle futures have not been able to move into the chart gaps while February and April contracts regained quite a bit of the losses from the reaction to the Tyson fire. The strength in feeder cattle led the market higher. There is an expected larger offering of cattle this week due to light activity last week. Cash bids and offers will be established Wednesday as buyers and sellers become a bit more serious.
Lean hogs certainly are a mystery. There was some unwinding of the October/December spread, but the market remains bearish. October closed its price gaps in the chart, which could increase technical buying interest. However, it appears all that may be hoped for is sideways trading. There are plentiful hog supplies with international demand questionable for the time being. It will come, but there is no way of knowing when and how much.
| BULL SIDE | BEAR SIDE | ||
| 1) |
Live cattle futures seem to have support at the 20-day moving average. This could generate follow-through buying Wednesday.
| 1) |
October and December futures have been unable to close any of the chart gaps left earlier in August. It will take a monumental effort to push prices above chart resistance.
|
| 2) |
Lower cut-outs may improve demand. Increased demand will make packers more willing to raise bids to procure cattle.
| 2) |
The delay in packers establishing bids could mean they do not want to bid higher than last week as they have been waiting for offers to develop before stepping up.
|
| 3) |
October hog futures closing the chart gaps could increase trader interest
| 3) |
Hogs prices continue to struggle as market-ready hog numbers are large, rendering it a buyer's market. Cut-out prices continue to struggle.
|
| 4) |
More news of African swine fever being discovered in South Korea could eventually mean more demand as shortfalls will need to be covered.
| 4) | There remains talk of better international demand, but that has yet to develop. Continued cases of African swine fever continue to have little impact on demand and prices. |
 |
| #completeherdhealth |
No comments:
Post a Comment