Thursday Morning Livestock Market Update - Beef Labeling Announcement Coming

GENERAL COMMENTS:

Feeder cattle approached nine-month lows on Wednesday with pressure hitting the cattle market from all sides. Mexican cattle are coming into the country after a long border shutdown. Beef is being imported as fast as it can to take advantage of the 90-day tariff relief. On top of this influx of product entering the United States, we also are seeing announcements from the government hitting the news nearly every day. Rollins suggested a beef labeling announcement should be made by the end of this week, as well as reports of Congress considering a government loan program to assist with herd retention. Earlier this week, we heard of a heifer retention program to be rolled out with no details found anywhere at this time. USDA will also be rolling out some new technology for data reporting coming soon. All of these factors play a part in the beef industry; unfortunately, the market isn't sure what direction we should go from here.

Hogs traded higher in the front month on Wednesday despite lower pork cutout prices. The Daily Direct Hog Prices dropped, setting a bearish tone for Thursday's trade. Packers most likely have needs met for the week.

	BULL SIDE		BEAR SIDE
1)	Beef product labeling could help consumers feel safe purchasing products if it includes country-of-origin labeling. While we do not know the pending announcement at this time, it would be seen as a win by most producers.	1)	The news cycle has the greatest risk for the cattle markets. The government is trying everything they can to reduce the cost of beef in the grocery store but also regain some herd size. Both goals are difficult to use policy or government intervention to accomplish each at the same time.
2)	Midweek reports from sale barns suggest some meaningful strengthening of feeder cattle prices.	2)	Mexican live cattle crossing the border and foreign beef imports are adding product at an unknown rate this week.
3)	If futures strength can continue to trade higher due to technical strength, it could help the cash market.	3)	A break in pork cutout values as well as hog index prices does not bode well for continued futures strength.
4)	Labor Day weekend can bring some end of the summer grilling to help both pork and beef prices.	4)	Packers have most likely purchased their needs at this time from the cash market.