Mixed trade is expected early Monday morning with a combination of follow-through buyer support in lean hog trade mixed with short-covering in cattle trade. Limited volume will likely keep initial price moves narrow.
Cattle: Steady Futures: Mixed Live Equiv: $139.60 +0.17*
Hogs: Lower Futures: Higher Lean Equiv: $ 95.30 +1.75**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Limited trade developed late Friday afternoon with both sides unwilling to actively jump into the market until next week. The combination of bearish market psychology and pressure in futures has caused additional pressure to cash market interest at the end of last week. Although packers will remain short bought, the overall focus on additional market moves the next couple of days could create additional uncertainty in cash markets.
Most of the interest Monday morning will be focused on new showlist distribution and inventory taking. The reported Tyson plant fire late last week in Garden City, Kansas, is expected to limit early week production levels, but cattle are expected to be moved to other plants over the coming days in order to pick up a portion of the lost production.
Futures are expected to be mixed with recent pressure in feeder cattle expected to focus on the direction of corn markets before and after the USDA crop report late morning. Limited volume is expected in live cattle futures, which will likely keep prices hovering in a narrow range.