Thursday Morning Livestock Market Update - Cattle Futures Have Been Unable to Regain Friday's Losses

GENERAL COMMENTS:

Traders are trying to remain optimistic but are not yet ready to commit after the weakness on Friday. The cash cattle trade last week did not perform as well as hoped, keeping traders cautious over the cash trade this week. Boxed beef increased on Wednesday, with choice up $1.35 and choice up $2.61. There is no indication as to the potential for cash this week, as no bids or offers have been posted. Feedlots have been holding on to cattle, resulting in heavier weights. This has paid off, but there comes a point at which those cattle need to be moved, or they will cease being cost-effective. If packers remain unaggressive, greater selling interest may surface. The interest in feeder cattle and calves has not been as strong this week, with some of it due to the current weather conditions.

Hog futures continue to show surprising strength. Greater fundamental support is developing that may provide more confidence for traders to hold and/or add to long positions. The June and later contracts closed at new highs. The National Daily Direct Afternoon Hog report showed cash up $4.94. Packers have been more aggressive recently, possibly indicating market-ready hogs may not be as plentiful as thought. Pork cutout values increased by $0.51. Weekly hog weights dropped 4.9 pounds last week to average 292.8 pounds.

	BULL SIDE		BEAR SIDE
1)	Feedlots have not posted any offers so far this week. They may wait and see if there is any indication that packers might be more aggressive.	1)	There is uncertainty whether cash cattle will trade higher this week. Steady to lower cash may unfold.
2)	Boxed beef prices have been showing some strength, indicating demand remains strong. This may give traders more confidence to hold long positions.	2)	Cattle futures remain overbought, which could result in a further price correction.
3)	Weekly hog weights dropped 3.9 pounds to an average of 292.8 pounds. This may indicate marketings are becoming current and the supply of hogs may not be as large as thought.	3)	Weekly hog weights remain higher than a year ago at 292.8 pounds, 1.1 pounds higher than a year ago.
4)	The June and later hog contracts continue to close at new contract highs. Traders will continue to trade with the trend.	4)	Many believe hog supplies will remain available for slaughter in the coming months. This would limit the upside price potential.