Coming off of limited holiday trade last week, futures activity is expected to be back to full swing as traders not only return after the holiday break, but enter the month of December. Initial mixed trade is likely until additional morning volume develops through the entire livestock market.
Cattle: Steady Futures: Mixed Live Equiv $149.83 -0.14*
Hogs: Steady Futures: Mixed Lean Equiv $86.82 +1.92**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle traders are expected to get back into the swing of things following the holiday-shortened week disruptions of the normal schedule last week. With cash cattle trading $2 to $4 per cwt higher last week with most of the business done on Wednesday before leaving for the Thanksgiving holiday, it is expected that overall cattle movements were extremely light for the week.
With the month of December now here, the expectation that increased delivery of contracted cattle in the first couple weeks of the month will take the pressure off of lower negotiated cash cattle trade. But this could still lead to some uncertainty and potential early week buying needing to be done by some packers.
Most of the focus in cash cattle trade will be placed on inventory taking and show list distribution with limited bids or asking prices likely over the next couple of days. Despite a pullback in futures trade during the abbreviated Friday trading session, the firm undertone in live cattle futures remain.
Traders are entering the month of December with expectations of additional strong buyer demand through the end of the year as supplies are expected to start to slowly tighten over the coming weeks and months. This has traders eyeing additional potential support and higher prices through early December. Monday slaughter runs are expected at 118,000 head.