Monday Morning Livestock Market Update - Traders May Not Be Active Buyers

GENERAL COMMENTS:

Cash cattle closed the week with cash down $4 to $5 for both live and dressed cattle. The weakness of cash was both anticipated by traders and then confirmed by cash. The damage has been done and a recovery will fall far short of where the market was in September. Just last week, both live cattle and feeder cattle futures fell around $10.00. Even though futures closed mixed for live cattle and higher for feeder cattle, new lows on Friday keep a bearish tilt on the market. Boxed beef closed mixed with choice up $1.04 and select down $2.00. It will be a week filled with both anticipation and apprehension as the Cattle on Feed report will be released Friday and the government short-term funding deadline is Friday with little progress made so far on that front. It could be a volatile week for commodities but potentially little support for cattle. There was no Commitments of Traders report on Friday due to the observance of Veterans Day. It should be released Monday.

Hog futures moved in a sideways fashion last week, which may continue much of this week. Futures lately have had quite a bit of price movement during the day, generally closing in the middle of the swing. Traders seem to be day trading in the hopes of making a quick profit rather than establishing long-term positions. The National Direct Afternoon Hog report showed cash down $1.06, bringing the weighted average down to $65.95. Cutouts were higher Friday showing, a gain of $2.48. This should set the stage for higher trade early Monday as traders generally trade the cutout prices the following day, at least to begin the day. The Commitment of Traders report will be released Monday afternoon.

	BULL SIDE		BEAR SIDE
1)	Live cattle futures have chart gaps quite a bit higher that may be filled at some point.	1)	New lows were again established in cattle futures before contracts bounced. This does not confirm a bottom has been reached.
2)	Cattle futures may find some stability if funds have finished liquidating. The oversold market could bring buyers back in.	2)	Lower cash is expected again this week as packers may not be very aggressive. Feedlots have cattle that need to be moved.
3)	Hog futures have been holding sideways and may be finding support at current levels. Long-term buying interest may be developing.	3)	Hog futures have been unable to resume the uptrend. Any further weakness of cash and cutouts may trigger renewed selling.
4)	Hog futures have been able to hold in the face of outside market pressure which may provide traders with more confidence to buy into the market.	4)	Cash weakness continues to lower the weighted average. Packers continue to obtain the hogs they need without difficulty.