GENERAL COMMENTS:
Live cattle did not have much to go on during Friday's trade. Cash prices did not change, leaving traders mainly watching outside markets and anticipating what the upcoming week would bring. Packers are not anticipated to be aggressive this week if they do not need to be. Although there is expectation of tighter supply over time, the here and now indicates ample supply for the market. Boxed beef closed lower Friday with choice down $1.66 and select down $1.68.
Hogs found no support from the cash market Friday with the National Direct Afternoon Hog report showing a decline of $2.76. There is little expectation for cash to be higher Monday as packers will assess weekend demand, which will influence Tuesday's trade. Hog futures were able to close higher for the week, keeping the uptrend intact. This is the final week for the August contract, which may see limited movement. Cutouts were slightly higher posting a gain of $0.23.
| BULL SIDE | BEAR SIDE | ||
| 1) | Cattle have been in an uptrend with the anticipation of tighter supply as the year progresses. |
1) | There are sufficient cattle available to the market at the present time, limiting upside price potential. |
| 2) | October live cattle have a chart gap to the upside that may be filled sooner rather than later. |
2) | Slow export sales last week leave more beef on the domestic market, which may require lower prices to stimulate consumer interest. |
| 3) | The hog market continues to see support from the strength of cutouts. This indicates demand is holding well. |
3) | Cash hogs are expected lower Monday as usual, possibly limiting trader interest in buying futures. |
| 4) | Overall continued strength of cash should result in strength in the October contract due to the large discount. |
4) | Hog futures have chart gaps substantially lower that may be filled over time. |
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