Cattle: Steady Futures: Mixed Live Equiv: $144.32 -0.47*
Hogs: Steady to $1 Lower Futures: Mixed Lean Equiv: $ 87.52 -1.25**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Limited cash cattle trade developed Wednesday with prices in the North at $114 live and $186 dressed; a few cattle sold in the South at $113 per cwt. This was not enough activity to establish an accurate trend, although it did start the ball rolling, which may lead to additional market direction and activity as Thursday develops. Packers remain short bought following limited trade last week as they continue to fuel strong procurement schedules through the week. This may increase bids Thursday. Asking prices are likely at $115 and higher live and $186 to $188 dressed. Mixed futures trade is expected with the underlying weaker tone seen at midweek redeveloping. Even though the longer-term trend of the market remains lower, nearby live cattle futures have established a $4 trading range between $103 and $107 per cwt, which could continue through the near future. With very little fundamental or technical direction developing it is possible these recent boundaries may hold.
Mixed lean hog futures trade is expected to develop early Thursday morning with traders trying to rekindle buyer support following the firm shift lower over the last two trading sessions. The back-and-forth market swings in all lean hog futures through June allowed for a narrowing market range which has left the market directionless. This is adding increased softness to the entire complex, although the potential for a breakout in either direction is developing. Traders are looking for additional export sales to China in the weekly report released Thursday morning, but moderate sales the last couple of weeks have left markets sluggish with some trade expected despite the ongoing trade disputes. Cash trade is called steady to $1 lower Thursday morning with most bids steady. Expected slaughter Thursday is at 477,000 head. Saturday runs are expected at 68,000 head.
|BULL SIDE||BEAR SIDE|
|1)||Limited cash cattle trade Wednesday was steady to firm with last week's levels even though volume is still too light to determine a accurate market trend. The potential of increased spending should help firm feedlot managers' resolve through the end of the week.||1)||Wholesale beef values continue to struggle to maintain market stability as light-to-moderate pressure developed at midweek in choice and select cuts.|
|2)||Firm early week support in live cattle futures is helping to maintain recent price levels, which could spark firm but steady buyer interest in nearby live cattle contracts through the end of the week.||2)||Firm pressure continues to move into feeder cattle trade during the week. Much of this pressure is driven by higher corn prices, but lower feeder cattle prices continue to add weakness to the entire beef complex.|
|3)||Nearby lean hog futures continue to defend support levels above $83.35 per cwt as trade chops within a narrow range above these price points. This is allowing for increased underlying support to develop through the complex, potentially breaking out of this weaker trend.||3)||Strong underlying weakness in late 2019 contracts is adding pressure through the entire lean hog complex. Although traders continue to focus on short-term demand, long-term demand uncertainty is casting a dark cloud across the hog market as traders continue to add to the already strong winter discount in December futures.|
|4)||Firm cash hog trade pushed higher Wednesday with very active sales developing at these levels. Over 21,000 hogs sold on Wednesday, which is double to nearly triple the normal daily movement reported.||4)||Pork cutout values have struggled to gain any sense of support through the week with firm losses in rib and belly cuts leading wholesale pork levels lower. These cuts are traditionally the market leader through summer months, leading to growing uncertainty about growth in seasonal domestic demand.|
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