Thursday Morning Livestock Market Update - Cash Cattle Trade Expected

GENERAL COMMENTS:

Cattle futures did make an effort to move higher Wednesday, but traders did not commit to the prospect of higher cash. Feedlots may not be as willing to let go of cattle as no further trade took place. Cash trade is expected to take place Thursday, but traders may wait to see what develops before being more aggressive one way or the other. Boxed beef seems to be following the pattern of last week with lower prices as the week progresses. Choice cuts were down $1.33 with select cuts down $1.26. Weekly export sales are delayed until Friday due to the Veterans Day holiday Monday. Feeder cattle futures have developed a sideways pattern. Demand is strong for cattle with traders supportive but following the lead of live cattle.

Hog futures held up well after being under pressure for most of Wednesday. Traders became a bit more aggressive as packers were paying more for hogs. The National Direct Afternoon report showed cash up $4.15 on a good volume of hogs purchased. It is likely they have purchased most of what they needed and will pay less for hogs Thursday. It does indicate demand is strong and packers are maintaining a strong slaughter pace. Cutouts showed a decline of $0.42. Hog futures remain in an uptrend and continue to see support from the trade. Hog weights increased last week after decreasing the previous week.

	BULL SIDE		BEAR SIDE
1)	Feedlots may dig in their heels and accept nothing less than steady cash. Feedlots rejected the bids that surfaced from packers Wednesday.	1)	The weakness of boxed beef casts a cloud over the market for the time being. Some of this is seasonal but some may be due to high prices.
2)	Cattle futures have corrected from their overbought status, making it more attractive for traders to buy back into the market more aggressively for the long term.	2)	If cash cattle trades lower this week, there could be renewed selling as traders liquidate some of their long positions.
3)	Hog futures rejected the lower prices that dominated much of Wednesday with traders buying the weakness as they remain bullish prices.	3)	Hog weights increased last week to an average of 286.6 pounds, up 0.8 pounds from the previous week. Weights are now 0.7 pounds below a year ago.
4)	The packers were aggressive Wednesday as they need hogs to maintain the strong slaughter pace and satisfy demand.	4)	The packers are not expected to be aggressive Thursday, which may temper the enthusiasm of traders.