With all of the talk over the last week about trade negotiators getting “closer” to a deal, there remains anticipation Friday morning that some action may be seen before the weekend. This is keeping futures on edge.
Cattle: Steady to higher Futures: Mixed Live Equiv $141.68 -1.59*
Hogs: Higher Futures: Higher Lean Equiv $ 86.63 -1.53**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Light-to-moderate trade developed across the South Thursday afternoon with prices at $119 per cwt. Although there may be some additional cash sales trickling into the market Friday, the tone of the market is expected to have been set, with prices fully steady with last week’s price levels. The inability to command higher cash prices in the South appears to be a moderate disappointment to the futures market, which pulled back from early Thursday support.
But at the same time, the steady money should not come as a significant surprise as ample market-ready cattle continues to move to market and packers are attempting to stabilize margins, which have tumbled over the last couple of weeks. Northern trade still needs to develop with only a handful of sales developed Thursday, and not likely enough trade to establish a good trend. This may still allow for late-day activity, although it is likely that cash markets may hover around the steady range.
Futures trade is expected mixed to moderately lower early Friday morning with continued weakness in beef values starting to weigh on nearby and long-term futures trade. Although anticipation for tighter supplies through the first quarter of 2020 still remain the main focus of cattle trade, beef values have to regain support in order to keep prices strong. Friday slaughter runs are expected at 120,000 head.