GENERAL COMMENTS:
It has not been a good week for cattle with futures declining each day to close at the lowest level since December 9th. The February contract fell $5.47 over the past four days. This may have established a top at which it will be difficult to regain. However, cash cattle traded steady in the South and $2.00 higher in the North. This may provide support for today's trade. Although the Cattle on Feed report will be released this afternoon, The selling may have been overdone and futures may bounce. The average estimates for the Cattle on Feed report are for on feed as of December 1 at 99.9% of a year ago with the range of estimates for 99.4% to 100.3%. Placements in November at 95.9% with a range of 92.6% to 98.9% and marketed in November at 98.2% with a range of 97.7% to 98.7%. Boxed beef prices were mixed with choice up $5.05 and select down $1.44.
Hog futures traded in a tight range of about $1.00 as uncertainly clouded the market. There is uncertainty about demand in early 2025 and uncertainty over the upcoming Quarterly Hogs & Pigs report to be released on Monday. Today's trading may be confined to positioning ahead of the report. The National Daily Direct Aternoon Hog report showed cash up $1.42 as the packers wanted to finish their weekly purchases. This may leave them less aggressive today as buying is likely finished for the week. The weakness of cutouts may keep a little pressure on the market. Slaughter remains strong as the current demand is holding and hogs need to be processed. Saturday slaughter is estimated at 145,000 head.
| BULL SIDE | BEAR SIDE | ||
| 1) | Cattle futures may be overdone to the downside and may bounce today due to cash cattle trading steady to $2.00 higher. | 1) | February feeder cattle futures fell and closed below technical support which could result in further selling pressure to develop. |
| 2) | Technical selling has taken place over the past four days and should have run its course. Traders may have finished positioning themselves ahead of the Cattle on Feed report which may allow futures to bounce. | 2) | The recent weakness in cattle futures may be difficult to overcome as export demand has slowed and domestic demand may hold steady at best. |
| 3) | The packers were aggressive buyers in the cash market Thursday indicating continued strong demand for pork. | 3) | The recent trend has been down and may continue that way. Each time the market shows strength the level it reaches is lower than the previous rebound. |
| 4) | Hog futures may build support as the market has traded sideways to higher. Nearby contracts have remained sideway with later contracts showing better strength. The Hogs & Pigs report could reflect tighter supplies. | 4) | Cash hogs are expected to trade lower today with the packers likely less aggressive next week as they may already have most of their needs covered. |
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