Thursday Morning Livestock Market Update - Hog Futures Hold the Uptrend

GENERAL COMMENTS:

Bids and offers for cash cattle were posted Wednesday with distance between them. There were bids of $182 and offers of $186. Dressed bids were at $290 with offers at $295. There were a few trades in Iowa and Nebraska, but not enough to determine a trend. It is Thursday and some trading should be done today. Feedlots are hoping for higher prices, but they may need to settle for steady money at best. Boxed beef was higher with choice up $0.12 and select up $0.22. Cattle futures are in a holding pattern waiting for the pendulum to swing one way or the other. Weekly export sales may provide some price direction Thursday morning.

Hog futures remained under pressure Wednesday after an about-face Tuesday. The decline Wednesday still leaves futures in an uptrend, but a large price correction may be under way. After all, the market cannot go up forever without a price correction. However, the gain of $1.59 on the National Daily Direct Afternoon Hog report and the slight increase in pork cutouts of $0.06 could provide some support Thursday. Weekly export sales may also indicate international demand remains strong. Saturday slaughter is estimated at 88,0000 head.

	BULL SIDE		BEAR SIDE
1)	Cattle futures have been consolidating, waiting for further price direction and fundamental information, plus building a level of support.	1)	Cattle futures have been unable to move higher with technical price resistance developing.
2)	If cash cattle trade higher this week, futures may break above the sideways trading range they have been in.	2)	Higher cash for cattle is already factored in, which may limit upward price movement even if cash trades higher.
3)	Hog futures have had two negative days that seem to be technically driven rather than impacted by a change in fundamentals. The correction might be short-lived.	3)	There may be further price weakness in hog futures as the market corrects from being overbought. Fund liquidation many times lasts three days.
4)	The average hog weight last week declined to 287.3, down 0.4 pounds from the previous week. Hog supplies are current.	4)	Packers may have purchased most of the hogs they need and may not be as aggressive with cash the rest of the week. Hog weights remain 1.6 pounds higher than a year ago.