Friday Morning Livestock Market Update -

GENERAL COMMENTS:

Cattle futures began Thursday with negative information as weekly export sales were 45% lower than last week. Lower boxed beef prices kept the pressure on the market. Light cash trade, which took place $1.00 higher than last week, provides hope packers will need to be aggressive this week despite having some already booked from last week. So far, feedlots have been holding firm and may remain that way. However, cattle weights are around 3% higher than a year ago, leaving fewer cattle needing to be purchased to obtain a sufficient supply. Boxed beef prices suffered with choice down $1.28 and select down $2.49. This may leave packers on the defensive and unwilling to pay more for cattle.

Hog futures could not find support with lower weekly export sales and cutout values. Weekly export sales were down 27% from the previous week. Cutout values declined by $0.84, adding pressure to the market. The National Daily Direct Afternoon Hog report showed cash down $2.44 with a weighted average of $89.35. The pattern has been for cash to trade higher on Friday as purchases are made to fill the desired numbers needed to maintain an increased slaughter pace. The WASDE report will be released Friday, providing the expectation for demand and prices for the rest of the year.

	BULL SIDE		BEAR SIDE
1)	The early indication of light cash trade suggests cattle may trade steady or higher.	1)	Boxed beef continues to struggle as demand seems to have slowed. This will keep the upside price potential of cattle limited.
2)	Steady to higher cash may support the cattle market as June holds a discount to cash.	2)	Feeder cattle continue to trend lower, which keeps pressure on live cattle.
3)	Hog futures are oversold and may bounce into the weekend. There may be some interest to buy the break and hold for the long term.	3)	Further liquidation could develop if hog futures break below the lows earlier this week.
4)	The packers may be more aggressive Friday to finish the buying for the week. That has been the pattern over the past few weeks.	4)	Lower cash, cutouts, and export sales do not provide much support to the market. Traders may remain cautious and unwilling to be buyers.