Active support moving into the cattle complex during early week trade helped to solidify previous week’s gains. This is not only expected to spark additional futures interest but stimulate feedlot expectations when it comes to cash cattle trade.
Cattle: Steady Futures: Higher Live Equiv: $138.73 +0.75*
Hogs: Higher Futures: Mixed Lean Equiv: $ 82.71 +0.42**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle trade is expected to remain quiet early Tuesday with limited packer interest likely until Wednesday or later. A few asking prices developed late Monday in Nebraska at $115 live and $180 per cwt dressed, but cattle still need to be priced through the South. It is likely that cash cattle trade will be delayed until the end of the week, although the focus on futures gains is whetting the appetite and creating expectations of another strong rally through the end of the week.
Futures trade is expected to remain generally higher early Tuesday morning following the momentum shift higher the last couple of weeks and strong triple-digit gains able to hold Monday. December futures closed at $133.45 per cwt Monday afternoon, indicating a generally unchecked rally of $14 per cwt since hitting September lows.
A move above $114.30 per cwt would break through July resistance levels, sparking additional technical support through the remainder of October. Although supply tightness is expected during early 2020, the concern that this pace of upward movement in the market may be limited is expected to curb upward market support over the next couple of weeks.
Even though firm support is expected the next few months, the short term moves in the market are not likely to follow the aggressive upward trend over the last week. Tuesday slaughter runs are expected at 117,000 head.