Following the limited but supportive price moves Monday, trade is expected to remain generally sluggish through most of the morning Tuesday. Traders continue to focus on potential long-term meat demand and potential trade negotiations, but immediate issues are looming at the moment.
Cattle: Steady Futures: Mixed Live Equiv: $141.06 +1.16*
Hogs: Steady Futures: Higher Lean Equiv: $ 83.30 +1.50**
* 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 be quiet once again Tuesday. With generally smaller showlists circulating through the week, it is expected to point to a slight tightening of market-ready supplies in the near future. With the Kansas Cargill plant expected to be back on line with no major disruptions in the near future, overall daily and weekly slaughter numbers should return back to generally normal levels from the last couple of months.
There is limited news about the Tyson plant, but previous statements that Tyson plans to have the plant operational by the end of the year seem to still have credibility, and would restore overall packing capacity to full strength. This is expected to come at the same time as overall cattle supplies continue to slow. The combination of additional capacity and tighter market-ready cattle numbers should add increased premium to both cash and futures trade near the new year.
Futures trade continues to struggle to find significant buyer support early in the week, with an invisible ceiling at $114.50 per cwt in December contracts. Even though it has been hard to move prices above resistance levels, the ability for the complex to hold onto the majority of support in the last month and continue to test these short-term market highs is impressive, and it is sparking additional short-term interest. Tuesday slaughter runs are expected at 118,000 head.