The strong market selloff seen in cattle trade midweek is expected to create additional weakness through the complex early Thursday morning. Although there is likely to be an attempt to cover short positions during initial trade due to the increased market volatility.
Cattle: Steady to $2 Lower Futures: $1 Lower Live Equiv $145.86 +1.02*
Hogs: Steady to $1 Lower Futures: Mixed Lean Equiv $ 83.81 -0.99**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
The strong market shift lower Wednesday is expected to draw additional selling activity back into the complex Thursday morning. With cattle markets holding triple-digit losses through most of the midweek session in nearly all contract months, the focus on additional volatility being added to the market is leaving trade weak.
Nearby contracts have quickly pulled away from recent 2018 highs. At this point, there is little danger of breaking through short-term support levels as April futures would need to fall another $3 per cwt before additional concerns would develop. But the concern of not being able to hold previous market gains may add even more market uncertainty.
Cash cattle markets remain weak with limited activity in the complex. Light trade developed at $128 per cwt on a live basis, which is $2 per cwt lower than last week. This may bring additional packer interest to the market although initial interest is expected to remain sluggish Thursday morning.