There is no indication of a change in market direction at this point in cattle trade as the bullish undertone continues to hold. Traders continue to brace for a market correction, but strong fundamental support remains.
Cattle: Steady Futures: Higher Live Equiv $153.01 -0.09*
Hogs: Steady to Lower Futures: Mixed Lean Equiv $91.19 +3.67**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Limited movement is still expected in cash cattle trade Tuesday although a few asking prices may become available as the day continues. Feeders are expected to attempt to stretch the envelope following the multi-week rally in cash cattle prices over the last couple of months. There is little indication to suggest a change in the trend ahead of the holidays as higher cash cattle trade may defy seasonal market trends through the next couple of months.
Futures are expected mostly higher with spillover support developing after Monday’s continued firmness in all nearby contracts. New highs for the market rally developed in February and April contracts Monday, helping to continue the bullish market trend that has pushed prices over $20 per cwt from September lows. This continued focus on expanding the trading limits and cutting into the spring highs is not only based on fundamental market support and expectations of tighter supplies through the upcoming months, but technical bullishness continues to develop.
Even though much of the Midwest is experiencing a strong cold snap, this is not yet having a major impact on the overall market as temperatures are expected to moderate quickly through the end of the week. Tuesday slaughter runs are expected at 118,000 head.