Wednesday, February 14, 2018

Wednesday Morning Livestock Market Update - Early Mixed Trade Likely Midweek

GENERAL COMMENTS:
Little to no activity is expected in cash cattle trade early Wednesday morning, although packer interest may start to become more evident through the day. The development of the Fed Cattle Exchange Auction will take place Wednesday, although unless a significant change is seen in overall cattle offered or cattle sold on the exchange, this will not be a major focus of cash market activity. Active cattle sales are likely to hold off until the end of the week once again. Futures trade is expected to remain mixed in light early-morning trade and will likely be stuck in a narrow range.
Limited trade activity is expected once again Wednesday following the weaker tone of the complex on Tuesday. The overall support that seemed so promising early in the week will likely be sluggish over the near future. This couldeasily turn into additional longer-term market pressure once again. Cash hog markets are expected to be steady to $2 per cwt lower with most trade activity likely to be $1 lower. Packer runs are expected to be 465,000 head Wednesday. Saturday runs are expected at 75,000 head.
BULL SIDEBEAR SIDE
1)Buyer support in deferred feeder cattle futures through the early part of the week is expected to help draw additional longer-term support to the entire market over the next several trading sessions.1)Despite the fact that packers appear to need additional cattle numbers, the lack of early-week bids is causing concern that many of these packers will be unwilling to boost cash price levels over the near future.
2)Feedlot managers are holding on to firm asking prices of $130 per cwt live and higher early in the week with the expectation of cattle prices being boosted higher by packer needs through the end of the week.2)Light pressure in nearby live cattle futures has quickly tempered the expectation that additional long-term buying may quickly move into the market. This could lead to additional pressure through the rest of the week.
3)Light but supportive buyer activity in spot month February contracts could bring additional longer-term gains back into the market and may draw additional buyers back into the market over the next couple of weeks.3)Sharp losses in nearby April contracts is trying to test short-term market lows set late last week. The inability to hold Monday's gains is likely to create additional market pressure through the entire complex.
4)Pork values have rallied higher with moderate to firm buying activity in most primal cuts early in the week. This is a significant market shift from the aggressive losses last week, and may build longer-term support to the market.4)Additional market losses continue in the cash hog trade as packers focus on margin stability given the aggressive pork cutout pressure. This may add even more weakness to cash markets through the end of the week despite tightening supplies.

No comments:

Post a Comment