GENERAL COMMENTS:
From a technical perspective, cattle futures have a lot of room to climb now that they've secured their movement above the 200-day moving average. Corn weakness helped early in the trade Wednesday and when it rebounded slightly, cattle futures pulled back a bit from their highs. Cash market for fats is expected to be quiet all week. A lot of cattle sold at the end of last week, and with the Cattle on Feed report coming, many buyers are hesitant to take on a big position. Traders however are bullish with lower on-feed numbers expected and lower placements.
The weekly average hog weights were released Wednesday. The national average carcass weight increased week over week by 0.6 pounds to 218.3 pounds while the live weights dropped 1.6 pounds to 286.2 pounds. Carcass weights increase year over year by 1.8 pounds while live weights drop 0.5 pounds. For pork cutout values, it was a tough day for pork, falling $4.03. With the holidays approaching, the market should be looking for opportunities to start stocking up on their needs.
| BULL SIDE | BEAR SIDE | ||
| 1) | The Cattle on Feed report is expected to have lower on feed as well as placements Friday. | 1) | Beef cutout values have been choppy lately, making the market question consumer demand. |
| 2) | Technicals continue to be positive for both live cattle and feeder cattle futures. | 2) | Lack of cash trade shows packers are comfortable waiting to cover needs after high slaughter numbers in the last two weeks. |
| 3) | Holidays are approaching, so demand usually picks up for pork in the last quarter of the year. | 3) | Pork bellies and picnic cuts had some of the biggest drops in cutout values, despite being some of the usual biggest demand products for pork. |
| 4) | The market is appearing oversold for lean hog futures. | 4) | Trend is not the producer's friend when all signs show a steady long-term trend lower. |
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