Limited but firm support is likely to redevelop in cattle futures as traders attempt to slowly but steadily move back into the oversold market structure. Hog futures are expected generally weak following aggressive losses Wednesday.
Cattle: Steady to Higher Futures: Higher Live Equiv: $154.99 +0.37*
Hogs: Lower Futures: Mixed Lean Equiv: $ 86.10 -2.67**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle activity through the rest of the week will become a larger focus of the market as packer bids have been generally quiet through the first half of the week. A few cattle were sold in the South at $105 to $107 and $172 to $175 in the North Wednesday afternoon, but this is not enough movement to establish any sense of market trend at this point.
Packer interest is expected to improve through the day, although active trade may be delayed until sometime Friday, and potentially after the Cattle on Feed report Friday afternoon. Asking prices remain at $108 in the South and $178 in the North. Futures trade is expected to open steady to higher with limited but supportive follow-through buying moving into the complex.
The ability to add consistent but firm support to the weak market complex continues to add uncertainty to the entire complex as traders focus on trying to rebuild following last week’s losses and establishing fundamental and technical support through the end of the week.