Cash cattle trade has once again made it to the
end of the week with limited to no market activity developing. Packers
will once again have their hands full trying to buy cattle as they are
expected to remain extremely short bought once again. Bids are expected
to start similar to earlier offers, at $122 live and $198 to $200. But
without a major shakeup in futures trade or outside markets, feedlot
managers are unlikely to show any interest. Asking prices are holding at
$126 to $127 live and $203 and higher dressed. At this point, it could
be late in the day before most trades are in the book. Futures trade is
expected mixed with the late day support seen Thursday bringing some
underlying strength to the market. End-of-week positioning is expected
to be the main order of business most of the day Friday as traders may
continue to wander in the current market range.
Cash market moves are not expected to show any
surprises at the end of the week with packers offering steady to 50
cents per cwt lower once again. Once the dust settles it is expected
that most bids will remain steady to weak, but the ability to buy hogs
for the weekend and potential early next week could help to support
late-day price levels. Futures trade is expected to remain sluggish with
follow-through weakness developing. Traders remain focused on the still
weak fundamentals in the market, which may quickly test long-term
support levels. A move to contract lows in nearby contracts at the end
of the week, could spark additional longer-term weakness through the
entire lean hog complex. Slaughter runs are expected at 469,000 head
Friday. Saturday runs are expected at 214,000 head.
| BULL SIDE | BEAR SIDE |
| Higher cash cattle prices are expected by the end of the day once cash markets develop. This is likely to help bring additional buyer interest into live cattle and feeder cattle futures. | Another round of winter storms is working through the country during the next few days. This will not only hamper transportation and processing schedules, but will limit daily gains in feedlots, and likely cause death losses. |
| Late-week pressure in grain trade based on weather conditions in South America and generally weak grain demand is helping to instill additional price support through feeder cattle trade. | Beef cutout values continue to remain unresponsive to the underlying support in cash markets and generally firm futures trade. This is causing some underlying concerns that demand may be struggling to keep up with current supplies. |
| Firming cash hog values Thursday is likely to help draw limited support to the market which is focusing on the potential for increased market support to develop through the complex in the next couple of days. | Lean hog futures once again find themselves on the verge of breaking through short-term support and setting new contract lows. A move below these levels would likely spark additional liquidation. |
| Continued long-term expectations of renewed trade agreements is limiting active pressure to continue through the market. Although the timeline is illusive, most feel that exports will improve at some point. | Wholesale pork prices continue to show little to no support at the end of the week with aggressive losses developing in pork belly prices. This is likely to limit support over the next couple of days. |
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| #completecalfcare |
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