Thursday Morning Livestock Market Update - Feedlots Hold For Higher Prices

GENERAL COMMENTS:

Live cattle futures easily pushed through technical resistance once Northern dressed cattle traded $3.00 higher. This indicated Packers were short-bought and needed to step up aggressively to procure cattle needed to fulfill their slaughter plans. Southern live cattle did not show further trading activity, but that should surface Thursday and may trade higher. Cash traded earlier this week at steady money, but the action on Wednesday should have feedlots holding their ground for higher cash. Boxed beef prices were lower with choice down $0.50 and select down $1.54, but that weakness may not impact the market Thursday. December live cattle futures closed at the highest price since Oct. 18, 2023. Feeder cattle futures kept pace with triple-digit gains as the losses of the past two weeks may be regained.

Hog futures began Wednesday trading higher but the buying interest did not carry through, resulting in prices spending much of the day in negative territory. The losses were moderate but still added to the recent downtrend that developed in the market. It is unclear whether this is a market correction or if prices have reached the top. Cash prices may settle back for the rest of the week as the packers have been aggressive in the first half. The National Daily Direct Afternoon Hog report showed cash down $0.72. Pork cutouts were $0.27 lower. The June and July contracts closed below $100 for the first time since Nov. 22.

	BULL SIDE		BEAR SIDE
1)	Strong cash cattle prices indicate packers were short-bought and needed to step up to purchase cattle to maintain slaughter and satisfy demand.	1)	Packers may be more aggressive in purchasing cattle this week to prepare for the holiday period. They may not be very aggressive through the rest of the year.
2)	Live cattle futures moved quickly above technical resistance and held the gains Wednesday. This may give traders confidence to add to their long positions.	2)	Some traders may become more nervous as the cattle futures push higher. Weekly export sales may have an impact on whether these prices can be maintained.
3)	The recent weakness may be a temporary correction and may result in traders viewing this as a buying opportunity.	3)	The hog market may have established a top for the time being. Cash and cutouts have been struggling in a range.
4)	Weekly hog weights remained unchanged at 289.1 pounds. This is 1.5 pounds below a year ago.	4)	Traders will need to step up to defend their long positions or further liquidation of hog futures may be seen moving to the end of the year.