Cattle: Steady Futures: Mixed Live Equiv: $134.12 -0.31*
Hogs: $1 Lower Futures: $1 Lower Lean Equiv: $ 83.62 -0.59**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle trade may be done for the week following light to moderate trade in all areas that developed Thursday afternoon. Live trade is fully steady with last week at $111 per cwt while dressed trade is seen at $173 to $174 per cwt, which is $1 to $2 per cwt lower than last week, and generally $1 per cwt lower than the previous day. Futures trade is expected to remain sluggish with a combination of short-covering, especially in deferred contracts, while the general weaker tone could add some additional uncertainty to the market and allow pressure to redevelop at the end of the week.
Strong pressure through the lean hog futures complex through the week has created some additional weakness across the entire complex. This may add to early-morning selling activity as traders try to find some stability at the end of the week. Cash hog values are expected steady to $2 per cwt lower given the overall weakness in the complex, although most bids are expected to be steady to $1 per cwt lower early Friday. Total slaughter schedules for Friday are expected to be around 464,000 head. Saturday runs are expected at 164,000 head.
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Firm buyer support stepping into nearby live cattle futures late-day Thursday is expected to spur additional underlying activity at the end of the week.
Steady to lower cash cattle trade, which become more evident Thursday, is expected to add increased pressure to the entire complex.
Nearby live cattle futures have been firmly planted through the last week with October live cattle futures strongly defending the $112 per price points, as traders remain focused above this support level.
Strong corn market gains Thursday following the Bullish USDA supply and demand report is sparking additional widespread pressure through the feeder cattle futures.
Continued stability in spot month October contracts continues to take some of the pressure off of weakness in other nearby contracts. This is expected to help keep overall cash and pork values stable through the end of the month.
December and February lean hog futures have continued to quickly erode through early October. This has pushed these contracts over $5 per cwt lower in the last two weeks, leading to concerns of further market pressure.
Expected strong pork demand is still the focus of the hog complex with increased overall domestic movement helping to limit long-term pressure at this point.
Extreme pressure in outside stock markets has added even more uncertainty to the entire meat complex and especially the pork market as widespread trade nervousness surrounds the potential to sustain economic growth and move product at an aggressive pace.
Rick Kment can be reached at email@example.com
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