It is expected that additional cash cattle interest will develop through the day Wednesday, although at this point, it seems a little premature to expect moderate to active trade to develop midweek as most activity is likely to be pushed off until Thursday or Friday. Asking prices are expected to remain firmly planted with live cattle in the South priced at $122 while dressed cattle in the north carrying a $193 and higher price tag. The fact that bids are not yet developed should be no surprise even though packers seemed to go into the week generally short bought following the holiday trading week. The stability in futures trade and expectations of increased packer activity through the end of the year is likely to point to steady to higher cash prices once the dust settles at the end of the week. Futures trade is called mixed in limited early trade. Although late day support Tuesday helped to pull prices away from a moderate sell-off, the general tone of the market remains firm but cautious. Wednesday slaughter runs are expected at 118,000 head.
Lean hog futures surged higher Tuesday, helping to lead increased support to the expectation that additional buyer support will redevelop through the complex. Trade volume is expected to remain limited early Wednesday with a combination of follow-through buying and position taking seen at opening bell. But the firm technical move above recent lows not only sparked short-term interest, but also put distance between current prices and long-term support levels. Cash hog prices have bounced higher each of the last two days, sparking some expectations that the seasonal lows may have been logged although current market ready hog levels still remain abundant. This may continue to add increased short-term support through the market as traders look for firming end-of-year holiday demand to help bolster domestic pork demand despite the lack of changes in the China trade situation. Cash hog bids are expected to $0.50 lower to $1 higher per cwt with most bids steady to $0.50 higher. Slaughter Wednesday is expected at 493,000 head. Saturday runs are expected at 325,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) | The U.S-Japan Trade deal has cleared Japan's parliament Wednesday morning, putting in motion the expectation that the deal will be implemented at the first of the year. This should help to support beef demand shipped to Japan on a short- and long-term basis. | 1) | Limited futures support in all cattle trade during early December is creating some underlying concerns about the ability to move through resistance levels in the near future. Although prices continue to hover near the top end of the trading range, the ability to spark active support to continue to push prices higher seems generally limited at this point. |
| 2) | Expected supply tightness through the 1st quarter of 2020 is likely to solidify underlying support through the entire complex over the coming weeks. | 2) | Warmer weather through much of the Midwest and active cattle feeding areas is curbing buyer support as traders focus on improved feeding conditions. This may add to additional underlying softness in futures prices, and potential lackluster cash market support through the end of the week. |
| 3) | Cash hog prices have moved firmly higher each day this week, helping to point that seasonal cash market lows may be in the books, as traders look for additional underlying support through the end of the year. | 3) | A statement by President Trump that a trade deal with China may not develop until after the 2020 elections splashed ice-cold water on the hope of a quick resolution to the ongoing trade war. This may continue to add pressure to lean hog trade based on overall export pressure. |
| 4) | Sharp $2 gains in nearby lean hog futures trade Tuesday sparked renewed optimism through the entire complex. Although prices have a long way to go before breaking out of this weaker pattern, the move above last Friday's highs sparked technical support in nearby contracts. | 4) | Despite the sharp shift higher in hog prices, it is important to remember that hog supplies remain extremely strong and will continue to remain aggressive through the end of the year. This will continue to push pork through the pipeline with the hopes that additional long-term demand will develop. |
 |
| #completeforageprogram |
No comments:
Post a Comment