Friday Morning Livestock Market Update - Cattle Trade May Develop at Steady Cash

GENERAL COMMENTS:

Traders were rattled as substantial selling pressure permeated throughout the equity markets and other commodities. There was positive news as Mexico and Canada's livestock and beef are not impacted by the tariffs under the USMCA agreement. Tariffs have been put on beef imported from Australia, which could be supportive for the U.S. market. There were a few cattle traded on Thursday at steady money with last week. Packers may not bid higher than steady money to purchase cattle this week due to market uncertainty. Feedlots may be willing to sell cattle to avoid the potential for lower cash prices. Weekly export sales were better than the previous week with 9,300 metric tons (mt) reported. Sales will be closely monitored in the coming weeks to see if tariffs will impact international demand. Boxed beef prices were lower with choice down $1.53 and select down $0.99.

Hog futures were lower and suffered only double-digit losses. This was supportive given the substantial pressure seen on some of the other markets. Futures need to find support soon, or further liquidation could be triggered. International demand has been good with weekly export sales totaling 53,000 mt and a marketing-year high. Packers were not aggressive on Thursday with the National Daily Direct Afternoon report down $1.21. Pork cutouts gained $1.11. Packers may be willing to pay more for hogs Friday as they will want to complete purchases for the week. Futures may bounce ahead of the weekend if the outside markets find some footing.

	BULL SIDE		BEAR SIDE
1)	Higher tariffs on Australian beef may be supportive for the U.S. market as less beef may be imported.	1)	A slowing of the economy and a potential recession could impact beef demand and reduce prices despite tight cattle supplies.
2)	If the selling in the equity market settles down and finds some support, traders will be willing to continue to support the cattle markets.	2)	International beef demand may slow, allowing for more beef to be available to the domestic market.
3)	Hog futures held up well despite the pressure seen in many other markets. They had much of it already factored in.	3)	Hog futures have not been able to find consistent support from either cash or cutouts. Demand has not increased as anticipated.
4)	Pork export sales to Mexico should be unhindered. They are a large buyer of U.S. pork.	4)	China is imposing a 34% tariff on all U.S. imports. They are a large buyer of pork and would impact sales to the country.