Following late-week pressure in all livestock markets, traders are expected to cautiously enter the market Monday morning with mixed expectations. Limited market direction is expected early Monday, although prices may remain scattered in a mixed range.
Cattle: Steady Futures: Mixed Live Equiv: $139.90 +0.09*
Hogs: Lower Futures: Mixed Lean Equiv: $ 81.80 +0.75**
* 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 late last week remained mixed when trade finally developed on Friday. Trade in the North sold at generally $1 per cwt higher, with most sales at $108 per cwt. Southern trade traded steady to $1 per cwt lower than the previous week. The slaughter reductions at the Cargill plant in Kansas still dark at the end of the week, limiting the cash cattle market in the area on a short-term basis.
The current expectation is that the plant will be operational this week with reports pointing to early in the week. Even with two plants down in Kansas at this point, the fact that cattle supplies have backed away from fall highs, should limit the long-term pressure in the market given that the Cargill plant is able to resume production in the near future.
Futures trade slipped lower Friday as traders continue to focus on a potential correction developing following the strong upward market shift over the last six weeks. It is uncertain if traders will remain content with the moderate pressure developing in live cattle trade Friday, as trade may wander within a narrow-to-moderate range the next couple of weeks.
The ability to move and hold prices above $114.50 per cwt in December contracts would be needed to help stimulate additional long-term buyer support through the cattle complex. Feeder cattle futures led the market lower late last week with the same cautionary focus on traders looking for a light-to-moderate price correction.
The increased availability of young calves on the market through the next month will continue to add uncertainty to the upward support in feeder cattle trade through the end of October. Monday slaughter runs are expected at 113,000 head.