Although limited overall activity is expected to be placed on cattle market direction and activity through most of Wednesday, cash trade will likely be still the main focus of feedlot managers and packers. Only a few cattle have been reported sold across the North Tuesday, which is still likely not enough to establish a good market trend, but the expectation is that prices may not deviate too far from last week during the holiday-shortened week. Both sides are wanting to get cattle on the books by the end of the day in order to not need to return Friday and finish business for the week. But with heavy snow amounts in many areas of the Northern cattle country already and another round of winter weather expected through the next couple of days, selling cattle may be less of a priority than cleaning bunks and lots. Given everything else going on through the week, cash business may be quick to develop as both sides may not be willing to drag the process out through the end of the week. Futures trade is expected to remain generally quiet with mixed trade likely early Wednesday. The ability for nearby contracts to regain most of last week's losses over the last two days is helping to solidify underlying market support going into the holiday weekend. Although markets will remain open Wednesday and Friday, limited long term direction is expected due to light holiday trade. Wednesday slaughter runs are expected at 117,000 head.
Sluggish overall activity is expected leading up to the Thanksgiving holiday. Traders will continue to focus on holiday schedules and overall limited participation both Wednesday and Friday as many traders have already checked out for the weekend. This should keep prices shifts limited, although the limited market activity always opens the door for wide market swings with very little fundamental or technical support behind moves, making trade activity surrounding the holidays unpredictable but usually there is not enough volume to significantly impact long-term market direction. Cash hog bids are expected to $1 lower to $1 higher per cwt lower with most bids steady. Slaughter Wednesday is expected at 486,000 head. Saturday runs are expected at 385,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) | With the approaching Thanksgiving holiday both sides are expected to expedite the cash market process. This could point to steady to firm price levels in order to secure needed cattle Wednesday in order not to return to the market Friday after the holiday break. | 1) | The significant winter storm system moving through much of cattle country is expected to have a moderate impact on weight gains and animal health. Although many areas are not struggling with significant cold temperatures, the added moisture over the holiday weekend will disrupt normal schedules and impact animal performance. |
| 2) | The winter storm moving through much of the country is expected to have a firming impact on futures trade as traders focus on reduced gains and challenges in moving cattle to market over the next several days. | 2) | Winter weather over the holiday weekend will also affect travel activity. This will likely have a direct impact on overall meat demand through the long holiday weekend. |
| 3) | Continued focus on the need for China and most Asian countries to secure additional food supplies due to pork production reduced by African swine fever still carries an underlying firmness across the entire hog complex. | 3) |
With nearby lean hog futures holding near long-term support levels, the underlying tone of the market remains weak. The lack of expected trade volume could quickly push prices even lower during the end of the week with little to no fundamental backing due to lack of trade interest.
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| 4) | Firm cash hog market trade is developing through the week as the firmness in pork values have started to affect packer prices as they continue to focus on keeping plants full surrounding the holiday week. This could add to cash price support through the upcoming days. | 4) | Growing uncertainty continues to be seen surrounding any developments in trade relations with China and how this may affect pork exports to the country. As the process continues to be pushed down the road with hope that activity is being done in the background, pork prices continue in a weaker holding pattern. |
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