Friday Morning Livestock Market Update - Traders Will Focus on Cash Trade

GENERAL COMMENTS:

Cattle futures turned higher after early losses. Cash cattle traded $1.00 higher in the South and steady in the North. The anticipation became a reality, leaving traders confident to buy into the market. Cash trade was not expected until Friday but business being done on Thursday provided support. This likely set the stage for further cash trade Friday. Boxed beef prices continue to provide support with choice up $1.77 and select up $2.10. It has been a good week for boxed beef which should continue to support the market. Packers have reduced slaughter, which naturally would increase boxed beef prices. They need to improve margins and that is the way to do it. Reducing slaughter may also back up cattle in the country so feedlots will need to sell the cattle to move them and not remain in the positions to hold. Weekly export sales were 39% below the previous week which may be a result of higher beef prices.

Hog futures found support Thursday, turning contracts higher to retain the uptrend. Traders did not have the result of cash prices on Thursday as those prices were not released based on packer confidentiality. Cutouts were lower with values down $0.33. Support stemmed from strong export sales of 50,600 metric tons (mt), up 17% from the previous week. International buyers are not stepping back and want pork. October hog futures will cease trading Monday and December will take over as the lead month, carrying a $7.00 discount that may be eliminated if demand remains positive. Saturday slaughter is estimated at 170,00 head.

	BULL SIDE		BEAR SIDE
1)	Steady to higher cash this week will leave traders confident to hold long positions and support the market.	1)	The higher beef prices may impact international demand keeping exports at lower levels. It will also keep imports at a higher level.
2)	October live cattle futures closed at the highest level since Oct. 12, 2023. There is a chart gap remaining from Oct. 3, 2023, about $1.50 higher that may be filled.	2)	Traders are anticipating higher cash cattle trade than what took place Thursday. If further gains do not develop, October futures may decline to move in line with cash.
3)	Fund traders continue to defend their long positions in hog futures. Lower cutouts and the uncertainty of cash Thursday did not put pressure on the market.	3)	Pork cutouts have not provided much support so far this week. The higher slaughter pace keeps sufficient pork on the market.
4)	Strong pork export sales provided support as international demand remained strong. This will keep the slaughter pace above the level of a year ago.	4)	The packers may have purchased sufficient hogs for the week leaving them unaggressive in the cash market Friday.