Limited morning trade is expected in cattle and hog futures Wednesday as traders try to adjust to the wide market swings over the last couple of sessions. The rally in lean hog and live cattle trade Tuesday could bring stability to the market through the end of the month.
Cattle: Steady Futures: Mixed Live Equiv: $141.58 -0.25*
Hogs: Steady to $2 Lower Futures: Mixed Lean Equiv: $ 80.57 -1.75**
* 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 has been limited the last couple of days, which is expected to keep both sides sluggish early Wednesday morning. Packers are expected to bid similar to Tuesday around $107 live and $174 to $175 dressed basis. Asking prices are likely to become more evident as the day develops, although it is uncertain just how much trade will develop Wednesday.
Given the trend for midweek trade in the South over the last couple of months, it is likely that there could be a push to trade at least some cattle by the end of the day, but the softness of the cattle market will likely keep packers from aggressively pushing bids higher in the next few days. With the upcoming holiday week, it is also uncertain just how many negotiated cattle are needed to fill procurement schedules.
This could limit cash market support through the end of the week. Futures trade is expected to remain mixed in a moderate trading range. With strong gains Tuesday pushing prices off of contract lows, the focus now moves to follow-through buying and rebuilding underlying market support at these price levels. Weakness in feeder cattle trade will continue to limit the upside potential of the entire cattle complex in the next couple of weeks.