Now that the dust has settled on the latest trade negotiations and an agreement of a Phase 1 deal, traders will have a chance to focus on further expectations of where this may lead markets over the near future.
Cattle: Steady Futures: Mixed Live Equiv: $137.98 +0.51*
Hogs: Higher Futures: Mixed Lean Equiv: $ 82.29 +0.65**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash business finally developed in the South Friday evening, with another strong upward shift developing in cash cattle trade. Northern trade developed earlier in the day Friday with trade from $170 to $172 per cwt, mostly $172 per cwt and generally $2 per higher from the previous week. Southern trade was much more sluggish to develop with feeders holding tight to elevated asking prices until after the futures market close.
This helped push prices $1 to $3 per cwt higher from the previous week with prices at $108 to $109 per cwt through the South on a live basis. Due to the late nature of trade, it is still uncertain just how many cattle were sold in these areas, which will be reported Monday morning.
The continued bullishness in cash cattle trade over the last month is helping to return the focus on tighter market-ready cattle supplies ahead and likelihood that additional gains may develop through the end of October. Futures trade is expected mixed early Monday following a consistent but strong market really that ended the week.
With prices holding gains of 70 to 77 cents per cwt in all nearby contracts at the end of last week, the focus on continuing the market rally over the last month will once again be the focus. Currently December futures have pushed above $112 per cwt, for the first time since early August and have posted a rally of nearly $13 per cwt since September lows.
Traders are becoming much more confident that the seasonal lows are behind us, with continued focus on manageable supply levels through the end of the year. Monday slaughter runs are expected at 117,000 head.