Light-to-moderate buyer support is expected in the lean hog futures complex early Wednesday as traders rebound from early-week pressure with traders focusing on short-term fundamental growth.
Cattle: Steady Futures: Mixed Live Equiv: $144.18 -0.60*
Hogs: Steady Futures: Higher Lean Equiv: $ 93.65 +0.40**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle interest is expected to slowly improve Wednesday morning with limited bids in the South likely to redevelop within the same range as Tuesday. Asking prices in some areas of the South are likely to hold near $120. Activity and interest in the North has been quiet so far, which may push trade off until later in the week.
Futures trade is expected mixed with a combination of follow-through weakness and short-covering developing early in the session. While most other markets posted moderate-to-strong gains, the overall lack of support is creating additional underlying pressure in the entire complex.
Traders remain concerned that the current supply levels will continue to limit overall upside market support despite the continued ability to move wholesale beef product at a steady to strong rate.