Cash cattle market inactivity has reached the
home straight for yet another week with the potential for late-day
Friday trade once again almost assumed. Although asking prices and bids
have been available the last couple of days, neither side is willing to
budge from current positions. At this point, all sides hope that more
activity develops than last week and that it takes place before dark.
Traders are looking for new life in the market following the first of
March, allowing for the potential for increased market movement
following lackluster futures shifts the last two sessions. The strong
pullback in feeder cattle trade has created some nervousness through the
entire cattle market, making some wonder if a move above long-term
resistance levels is possible in the near future. Limited trade is
expected early in the session, leading to mixed market shifts.
Lean hog futures are well on their wayto
developing boundaries for a longer-term market range. April futures
ended the month of February at $55.87 per cwt after trading within a $10
per cwt trading range through the month. This range appears to be the
bookendsthat could contain the lean hog complex in the near future.
Continued concerns surrounding aggressive hog production and
market-ready pigs heading to packing plants is countered by expected
long-term support and an oversold market structure. Limited activity is
expected through the end of the week with most traders likely observing
initial market direction through early March. Cash hog values are
expected to continue to remain under pressure. This will likely lead to
steady to $1 per cwt lower bids, although most bids are expected steady
to weak. Friday slaughter runs are expected at 470,000 head, with
194,000 expected Saturday.
| BULL SIDE | BEAR SIDE | ||
| 1) | April futures continue to remain within striking distance of long-term resistance levels of $130.10 per cwt set in February 2018. A move higher at the end of the week could spark renewed market interest. | 1) |
Sharp losses in feeder cattle trade
has caused growing uncertainty in all cattle trade. With live cattle
prices unable to move above the $130 per cwt price level, some are left
to wonder if the top has been set.
|
| 2) |
Beef values have shifted higher at
the end of the month following continued active support in futures trade
and expected follow-through interest in cash trade at the end of the
week.
|
2) | Limited interest in cash cattle business through the week despite packers remaining short bought, is causing concern that packers may hold out once again, forcing more market-ready cattle to their disposal during early March. |
| 3) | Spot April lean hog futures are holding nearly $3 per cwt above support levels and contract highs. This has allowed some needed breathing room for buyers to slowly step back into the complex. | 3) | Wholesale pork values have wandered in a wild market shift, nearly daily bouncing back and forth from firm losses to active gains. The lack of consistency in pork primals is adding market uncertainty. |
| 4) |
Strong pork price firmness developed
Thursday, helping to solidify expectations that additional fundamental
support may develop through early March.
|
4) | Continued uncertainty surrounding trade agreements with China and lack of word on what this may mean for pork is allowing previous hopes to wilt slightly, as lean hog prices hover along in the bottom end of the trading range. |
 |
| #completecalfcare |
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