Trade Friday morning is expected to remain sluggish with a combination of follow-through buyer support and late-week position adjustments in sluggish morning trade. The volatile swings this week will add to unsteady end-of-the-week shifts.
Cattle: Lower Futures: Mixed Live Equiv: $151.64 +2.68*
Hogs: Steady to Lower Futures: Mixed Lean Equiv: $ 93.09 -0.67**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Limited market direction is expected early Friday morning in cattle trade as traders remain focused on regaining market stability as they slowly step back into the complex following the early-week market tumble. But buyer intensity quickly slowed late Thursday as traders focused on continued weakness in cash cattle trade.
Limited cash trade started to develop late Thursday afternoon in the North at $170 per cwt. This is $10 per cwt lower than last week, and generally in line with bids from the last couple of days. Barring additional wide shifts in futures trade, it appears the tone of the market may be set for the week with live trade in the South around $105 per cwt, while dressed trade in the North at $170 per cwt. This is generally $5 per cwt lower in the South and $10 lower in the North from last week’s levels.
The biggest question yet to be answered is just how many cattle will sell at these price levels, as some feeders appear to be willing to once again hold cattle over until next week given the aggressive rally in beef values helping sustain margins. This should give packers incentive to maximize capacity in the short-term due to the significantly improved margins.