GENERAL COMMENTS:
Live cattle fell 67.5 cents Wednesday on the October contract and $1.225 lower on the November. Cash trade did not amount to much, only one load at $226 in the South. Everyone seems to be holding out for the end of the week. Feeder cattle futures also fell Wednesday, trading $2.125 to $2.575 lower. Beef cutout prices were higher Wednesday afternoon. Choice increased $1.35 while select increased $4.80.
Hog futures traded $1.95 lower on Wednesday with pork cutouts lower, lean hog index lower and the lack of pork demand. The weekly estimated average weights of barrows and gilts came in at an average weight of 290.7 pounds, 0.5 pounds lighter than the previous week and 0.3 pounds lighter than one year ago. Pork cutout values fell $1.23 to $79.45.
| BULL SIDE | BEAR SIDE | ||
| 1) | Packer margins are seeing their eighth week in a row of positive margins. | 1) | Live cattle futures as well as feeder cattle futures are seeing resistance near the 100-day and the 200-day moving average. It will be difficult to surpass. |
| 2) | The longer cash trade remains quiet, the more likely that it will eventually catch up to packers and force them to step back into the market. | 2) | The news cycle has been some of the toughest hurdles to overcome for the beef market. It has been a while since we have had a new headline attempting to reduce prices. |
| 3) | Grocery stores are beginning to push pork sales and specials, which should spark some consumer demand. | 3) | Pork cutout values continue to fall, placing pressure on futures. |
| 4) | Hog numbers are reduced slightly versus this time last year. | 4) | Managed money is still near record short for lean hog futures. It will be difficult to rally until they lift more positions. |
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