Light to moderate pressure may redevelop in cattle futures Monday morning, although price levels may focus on choppy trade during the early hours based on a combination of short-covering and follow-through liquidation activity.
Cattle: Steady Futures: Lower Live Equiv $135.30 +0.83*
Hogs: Mixed Futures: Higher Lean Equiv $ 88.97 +0.55**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Follow-through pressure early Monday morning is expected to redevelop as traders continue to assess the overall long-term direction of beef supplies and end-of-year demand potential. The sharp losses that redeveloped late last week in feeder cattle markets have caused traders to look for additional long-term direction and renewed buyer activity.
Some short-covering could develop early in the session in both live cattle and feeder cattle markets. But the recent pressure may not be enough to establish strong support levels through the first half of the week. Cash cattle markets are expected to remain sluggish with little to no direction developing Monday as showlist distribution and inventory-taking are the main order of business.