Following limit losses that moved prices sharply lower Friday, cattle and hog futures are likely to focus on a combination of short-covering and follow-through pressure during early trade Monday morning. This may add increased volatility through the complex.
Cattle: Steady to Lower Futures: Mixed Live Equiv $145.99 -1.44* Hogs: Lower Futures: Lower Lean Equiv $ 78.13 +1.37**
* based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue
Interest in cash cattle markets is expected to remain subdued early Monday morning with both sides watching from afar at this point following the combined pressure last week in futures and cash cattle trade. Activity is expected to be limited to showlist distribution and inventory taking.
Following last week’s holiday, both sides are gearing up for a full week of trade and procurement levels. It is expected that daily slaughter levels will near 116,000 head. At this point with the Holcomb plant still idle from a slaughter prospective, daily totals of 116,000 to 117,000 appear to be the new normal, with additional plant runs on Saturday making up the balance of cattle still needed.
Sharp losses in futures trade Friday has quickly sparked long-term market concerns. October futures traded at the lowest point in nearly three years, but closed below the 2016 lows in front-month continuous charts. This is likely to add technical weakness, but the weekend break may have brought a “calming effect” to the market.