Limited activity in cattle trade appears to be gearing up for a range-bound market structure through the end of the year. Strong hog market gains put more emphasis on trade talks, although no schedule has yet been announced.
Cattle: Steady to higher Futures: Mixed Live Equiv $144.69 -0.96*
Hogs: Steady to higher Futures: Higher Lean Equiv $ 88.09 +1.14**
* 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 inching closer to getting business done Wednesday morning with limited asking prices and bids available by the end of Tuesday. Cattle are priced in the South at $121 to $122 per cwt with bids slowly developing at $118 per cwt. Limited interest is yet seen in the North, although both sides appear not to be in any significant hurry and trade may not develop until sometime Thursday or Friday.
Given the stability and narrow shifts in futures trade, and continued pressure in beef values, it may be a challenge for feedlot managers to demand much more than steady to firm once the dust settles at the end of the week. The erosion in boxed beef values seems to have triggered only limited concerns in futures trade as traders continue to focus on the still strong beef values as compared to where prices have held through most of the fall.
But traders will be looking for a sense of stability over the coming days in order to break away from the wholesale beef price freefall through the end of the year. Futures trade is likely to remain mixed again in a narrow to moderate range early Wednesday morning. With very limited long-term direction expected over the next couple of weeks, traders appear to be settling into a narrow to moderate holiday range, which may bring some additional stability to the complex through the end of the year. Wednesday slaughter runs are expected at 122,000 head.