Thursday Morning Livestock Market Update - Quarterly Hogs and Pigs Report to Be Released

GENERAL COMMENTS:

The cattle complex has seen lower prices since the Cattle on Feed report with futures unable to find solid footing. The general fundamental picture has been somewhat negative as boxed beef prices have been struggling this week and the looming government shutdown seems to have raised more concern over the impact it will have on the reporting of necessary information. Uncertainty generally is bearish to a market. There was some light cash trade Wednesday at steady to $2.00 lower. With futures falling as much as they have, it could be difficult to see higher cash this week. Boxed beef was mixed Wednesday with choice up $1.41 and select down $0.59. Thursday is the last trading day for September feeder cattle with October then taking over as the front month.

Hogs have been able to hold this week, but have made little progress in regaining what was lost last week. Two-sided trading is expected Thursday as traders position themselves ahead of the Quarterly Hogs & Pigs report to be released after the close. The average estimate for all hogs and pigs is down 0.7% from a year ago at 73.6 million head, the lowest since 2017. Marketings are estimated at 67.6 million head, down 0.6% from a year ago, also the lowest since 2017. Hogs kept for breeding are estimated to be down 1.5% at 6.1 million head. Cash was not supportive Thursday with the National Direct Afternoon report showing a decline of $0.37. Cutouts added to the uncertainty of the market, posting a decline of $0.52. Saturday slaughter is estimated at 201,000 head. One packing plant dark on Thursday due to maintenance will be running a full schedule Saturday.

	BULL SIDE		BEAR SIDE
1)	The uncertainty of the impact of a government shutdown may have been factored in, which may have traders buy into the market at lower prices.	1)	Feeder cattle have fallen substantially over the past week and ended below technical support Wednesday. Further losses are possible if futures do not bounce Thursday.
2)	The overall fundamentals of the market have not changed with cattle supplies expected to remain tight for some time to come.	2)	Initial cash trade steady to $2.00 lower does not bode well for the market keeping pressure on futures.
3)	Hog futures bounced from support and have been able to hold that level. Traders may be more aggressive buyers if the Hogs & Pigs report is neutral to friendly.	3)	Hogs have not been able to recover very much from the losses, leaving traders cautious ahead of the Hogs & Pigs report.
4)	Packers have not been aggressive so far this week but may step up more Thursday to finish purchases resulting in higher cash prices.	4)	Both cash and cutouts have been under pressure this week leaving little reason for futures to rally.