GENERAL COMMENTS:
Cattle traders did not have much to focus on leaving the market floundering on Wednesday. Cash cattle did not trade so far this week leaving traders thinking about the upcoming Cattle on Feed report. It seems a bit early to be positioning ahead of the report but with nothing else going on, it seemed like that was the thing to do. Boxed beef showed weakness with choice down $1.24 and select down $1.76. It is likely cash will trade lower again this week as the packers may not need to be aggressive. The Cattle on Feed report will be released on Friday. The trade estimates are for On-feed numbers on April 1 at 102% of a year ago. Placements in March are expected at 92.1% with marketings at 88.2% of a year ago.
Hogs seemed to be following the direction of cattle with little to get excited over. Cash was slightly higher on the National Daily Direct Afternoon Hog report with a gain of $0.09 and the weighted average moving to $89.13. The pork cutout price was unusual with it remaining unchanged from the previous day at $99.55. Futures are trying to find a bottom with limited price changes over the past three days. Weekly export sales are expected to be strong, but that may not be sufficient to push the market higher for the rest of this week.
| BULL SIDE | BEAR SIDE | ||
| 1) | April live cattle futures already have lower cash factored in and should see stability this week. |
1) | The anticipation is for lower cash cattle trade this week. The packers may hold the line to improve margins and that means not paying up to obtain cattle. |
| 2) | The Cattle on Feed report should continue to show placements significantly below a year ago indicating continued tight supplies. | 2) | The On-Feed number of cattle on the Cattle on Feed report may show more cattle placed in March than a year ago. The trend may slowly be changing to increased supply. |
| 3) | Hog futures seem to be building support over the past three days which may gain the confidence of traders be buy into futures as cash finds stability. | 3) | Hog weights were steady from a week ago at 288.0 pounds, but 1.0 pound above a year ago. |
| 4) | Demand for pork remains strong and packers need to fill that demand by running a strong slaughter pace. This should keep them aggressively purchasing hogs. | 4) | The packers may not need to be aggressive the rest of the week as they have already purchased quite a few hogs. |
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