Cattle: Steady to $1 Higher Futures: Lower Live Equiv: $152.55 -0.64*
Hogs: Steady to $1 Higher Futures: Mixed Lean Equiv: $ 91.87 -1.94**
* 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 started to develop in the South Wednesday, with light-to-moderate trade in Kansas and Texas at $125 to $127 per cwt. This is generally steady to $1 per cwt higher than last week’s levels.
The midweek trade may be enough cattle sold for the week in the South, but if not, it will likely set the tone of the market for the week. Interest in the North was generally quiet, and will focus on redeveloping bids the next couple of days. With Wednesday trade in the South becoming consistent the last few weeks, it may change the overall weekly flow of the market.
Although at this point, any Southern business has been unable to move Northern trade from end of the week activity. Futures trade posted aggressive triple-digit losses following a technical shift lower that developed midweek.
The inability to hold short-term support levels of $120 per cwt in June futures created additional liquidation. Weakness remains evident through live cattle and feeder cattle trade, allowing for additional follow-through pressure Thursday morning.
Light to moderate buyer support, which developed midweek in the nearby lean hog trade is helping rekindle underlying support in the entire hog complex. Significant interest remains in overall demand strength and may continue to develop over the next couple of months surrounding a trade deal with China and additional exports due to China’s need for pork.
But the recent pullback in prices seems to have brought a sense of reality to the entire complex, which was needed following the emotionally driven buying spree based on essentially unchecked expectations of pork business coming from China.
Traders are expected to be focusing on establishing a generally realistic and sustainable trading range that will account for moderate-to-strong domestic demand and still continued movement of pork to China. There is still little reliable information about the overall situation of hogs and pork production in China so it is going to be hard to pinpoint short- and long-term needs for pork.
Cash trade is called steady to $1 higher Thursday morning with most bids steady. Expected slaughter Thursday is at 477,000 head. Saturday runs are expected at 143,000 head.