Wide market shifts over the last two trading sessions is setting up the potential for cattle futures to expand recent gains, while lean hog futures continue to search for support surrounding export demand.
Cattle: Steady to Lower Futures: Mixed Live Equiv: $142.29 -2.72*
Hogs: Lower Futures: Lower Lean Equiv: $ 77.26 +0.46**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle business is essentially dead in the water going into Thursday morning. Although a few cattle were sold Wednesday afternoon, there were not enough sales to establish a market trend. Packer interest is expected to redevelop through the morning although trade may not develop until late Thursday or sometime Friday. Cash markets remain stuck between the strong rebound in futures trade the last two sessions, while pressure in wholesale beef values has continued to shift through the complex.
Although packer margins still remain attractive that won’t deter increased plant speed any time soon, but upward movement is likely in cash overs. Futures trade is expected to remain firm early in the session with follow-through support likely. But the aggressive market shift the last two trading sessions is also creating some position-taking opportunities for many traders. Cattle slaughter is expected to remain at 117,000 head Thursday.