Traders come back to the complex Tuesday morning following strong Monday moves in beef and pork values as traders look to regain previous market weakness although trade early Tuesday is still expected to remain sluggish.
Cattle: Steady Futures: Higher Live Equiv $143.77 +0.80*
Hogs: Steady Futures: Higher Lean Equiv $ 80.39 -0.01**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Limited direction is expected in cash cattle trade Tuesday as bids and asking prices are likely to remain quiet through the first half of the week. Even though Monday was a market holiday, packers were still open for business, but the shorter week will likely spark some early week interest.
Given cash cattle trade at the end of last week ended generally steady to $1 per cwt lower, most traders are likely looking at creating additional stability through the month of January. Although market-available cattle are tightening significantly, so are packer margins, which will limit the desire for many cattle buyers to dig deeper into their pockets in order to fill buy orders.
This could lead to another end of the week standoff. Futures trade is expected to open firm to moderately higher following the gains in boxed beef values Monday. Select cuts rallied $0.73 per cwt, while choice cuts bounced $0.47 per cwt higher early in the week. Even though live cattle prices pulled off of recent highs the last two weeks, the market still remains well within the sideways trading range near the top end of the market.
This is creating some potential firm support early Tuesday on which commercial buyers may step back into the complex. Tuesday slaughter runs are expected near 121,000 head.