Friday Morning Livestock Market Update - Limited Volatility Expected

GENERAL COMMENTS:

Weakness in live cattle futures that was evident during the day, was finally overcome allowing futures to close mostly higher. One could say that this was the result of a much better weekly Export Sales report showing sales of 17,100 metric tons (MT), but futures fell an hour after trading began before buying kicked it. The sales report ultimately had an impact, allowing contracts to close higher. However, lower lows and lower highs day keeps the downtrend intact. Cash trading in the South at $3.00 to $4.00 lower than last week and steady to $3.00 lower in the North does not bode well for the market moving into the holiday period. With higher weights, packers are back in the driver's seat and will likely attempt to purchase cattle at lower prices next week. The increase of boxed beef with choice up $2.71 and select up $0.69 was somewhat responsible for the minor futures gains Thursday.

Hog futures were stronger right from the get-go Thursday. Even though cash was $0.98 lower on the National Direct Afternoon report gains are still higher for the week. Weekly export sales were much better at 31,100 MT, up 38% from the previous week and 20% from the four-week average. The negative aspect was China showed up on the report with net cancellations of pork for the week, but they did purchase 700 MT for 2022. Cutouts showed some nice increases with the overall gain of $3.66. Cash is expected to be lower again Friday as packers have needs covered for the week and possible next week. This will leave them less aggressive. Saturday slaughter is estimated at 318,000 head.

	BULL SIDE		BEAR SIDE
1)	Cattle futures rebounded Thursday after first posting initial weakness. Traders digest the lower cash for the week and took profits and short positions.	1)	Cattle futures remain in a downtrend that began at the end of November.
2)	Better weekly export sales and higher boxed beef prices allowed for reduced selling pressure in futures.	2)	Cash cattle were lower again this week with the expectation of lower cash again next week as we move into the holiday period.
3)	Hog futures rebounded nicely likely from the positive export sales report. Even if cash is lower Friday, the week should show a gain potentially indicating a turn in trend.	3)	Hog weights have been increasing and chain speed slower, leaving more tonnage available to the market.
4)	Hog futures remain in the middle of a large trading range, leaving the market neutral.	4)	Packers may not be very aggressive Friday or next week due to the upcoming holiday period.