Friday Morning Livestock Market Update - Futures May See Pressure Ahead of the Weekend

GENERAL COMMENTS:

Cash cattle traded on Thursday following the trend of lower cash on Wednesday. Cash traded from $3.00 to $8.00 lower on Thursday. This pattern will be followed today as business will be accomplished for the week. It was a bit surprising that futures were higher with lower cash trade and the JBS plant strike taking place on Monday. These are not friendly fundamentals. However, some buying interest may have resulted from good beef export sales totaling 25,400 metric tons (mt), which is the highest so far this year. Packers continue to slow the slaughter pace, which is increasing boxed beef prices. Choice boxed beef was up $0.39, with select up $1.57. It may be an interesting and volatile day as traders position themselves ahead of the weekend.

Hogs may see further weakness as futures fell and closed below technical support. Traders had little to get excited about after the strong trend higher seemed to have run its course. Cash traded lower as expected, with packers having most of their needs covered. The National Daily Direct Afternoon Hog report was down $1.50. Pork cutout values increased by $1.88. Even though pork demand is good and packers continue to run at higher slaughter speeds, the market corrected from its overbought status. Further selling pressure is expected today as liquidation may continue.

	BULL SIDE		BEAR SIDE
1)	The cattle market may have lower cash trade and the upcoming strike already factored in.	1)	The duration and the impact of the strike at the JBS Greeley plant may result in further liquidation ahead of the weekend.
2)	Boxed beef prices continue to increase as the economic market uncertainty has not reduced consumer demand.	2)	Lower cash cattle trade this week may be followed up next week with similar pressure, as packers are expected to aggressively purchase cattle for later delivery.
3)	Pork demand has been good, and it is expected to remain. Futures are correcting from being overbought. Once that is completed, the market may rebound.	3)	Hog futures have been under pressure for the past two days, with another day of liquidation expected ahead of the weekend.
4)	Hog slaughter continues to run higher than the previous week and the previous year, keeping market-ready hogs current.	4)	Hog futures broke through and closed below technical support, which may trigger further selling pressure.