GENERAL COMMENTS:
Cattle futures held in positive territory until the final hour of trade on Wednesday as sellers gained the upper hand pushing contracts into negative territory. The hope for a significant price rebound any time soon seems to be dwindling. Closing the chart gaps remaining above the market will take a monumental effort to accomplish. Cash cattle have not done much so far this week with overall trade in the South $1.00 lower at $177 while dressed cattle traded at the steady price of $280. It is uncertain how active cash activity will be today, but anything that is done may be in line with these prices. Boxed beef was mixed with choice up $1.19 and select down $1.15. Feeder cattle futures are expected to drift today as there will be little, if any, sale barn activity as many have been closed for the week.
Hog futures struggled on Wednesday as there had been hope for better price direction for underlying cash. That did not materialize as the National Daily Direct Afternoon Hog report showed cash down $1.84 slipping below $60 to a weighted average price of $59.19. This may have some negative influence on trade today with further pressure possibly coming from the decline of $0.53 for cutouts. Generally, trading activity is light on the day after Thanksgiving but with electronic trade and traders being able to access the market from anywhere, trading activity may be more active. The markets will close an hour earlier, which may keep most of the activity more to the early part of the day. Saturday slaughter is estimated at 344,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) | There is hope demand for beef will increase into December which would provide support for the market as overall cattle supplies remain tight. | 1) | Demand for beef has not been as strong as anticipated with boxed beef reflecting slower demand. International demand has been lighter than desired. |
| 2) | Cattle futures have been able to hold technical support which may result in limited downside price risk if boxed beef finds a floor. | 2) | The market will close an hour earlier today, which could keep trading activity light allowing the market to drift lower. |
| 3) | Low prices should cure low prices and cash hogs have been beaten up enough with product prices low enough that demand might be stimulated. | 3) | Hog weights continue to increase with the average price last week at 288.0 pounds, up 0.7 pounds from the previous week and 3.6 pounds higher than a year ago. |
| 4) | A strong weekly export sales report today may provide some much-needed support to the market. | 4) | Hog futures breaking below support earlier in the week makes previous price support now being resistance. Cash is not expected to trend higher in the near term. |
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