Thursday Morning Livestock Market Update - Cash Cattle Trade Expected Today

GENERAL COMMENTS:

Cattle futures just had to bounce as it seemed feedlots have resolved to hold for possibly higher cash. Traders were cautious over just how much leverage feedlots might have this week, but it appears packers may have to bid up to obtain the cattle they need. Boxed beef prices were significantly higher adding to the friendly market yesterday with choice up $3.39 and select up $3.06. Retail outlets are restocking the meat case and needed product. Cash cattle have not yet traded this week and today will be a day of activity. There is some anticipation that packers will step up to the plate bidding higher to obtain the cattle they need.

Hogs had another strong day yesterday with August leading the charge higher. Price gaps were left on the opening as traders were aggressive from the opening bell. The July contract has a week remaining shifting more focus to August. Spread trading was still evident with contracts for 2022 posting triple-digit gains while later contracts were mixed. Cutouts did not perform especially well with a decline of $2.98. However, packers remain aggressive with the National Direct Afternoon Hog report showing a gain of $3.28. Slaughter picked up nicely with 10,000 more than a week ago and 15,000 more than a year ago. However, this may be revised lower as has been the recent pattern. Saturday slaughter is estimated at 122,000 head.

	BULL SIDE		BEAR SIDE
1)	Higher boxed beef means demand over the holiday was strong indicating consumers still want beef and are willing to pay for it.	1)	Corn prices rebounded into the close yesterday with strength again overnight. This may be negative to the cattle market.
2)	Live cattle futures held support which might result in technical buying. If cash cattle trade higher this week, further support might unfold.	2)	Packers may not need to be aggressive this week and may hold for no more than steady cash. There remains uncertainty over demand once shelves are restocked and it settles down to regular demand.
3)	Higher cutouts and strong cash this week have provided good support to hog futures. This may continue today as demand needs to be met.	3)	August, October, and December hog charts left a gap yesterday that will likely be closed at some point.
4)	A strong slaughter pace may leave packers needing to bid up to get what they need this week. Higher cash for more than two days might be considered bullish.	4)	The aggressive spread trading that has taken place over the past two days may see unwinding if cash and cutouts falter through the end of the week.