Following general pressure in most livestock trade late Tuesday, traders are looking for longer-term market direction as indications of steady cash trade may limit fundamental support in the coming days.
Cattle: Steady Futures: Mixed Live Equiv $144.08 -0.05*
Hogs: Steady Futures: Mixed Lean Equiv $ 83.11 +1.08**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle trade appears to be sluggish to start this week given the short trading week and general lackluster activity surrounding the cattle complex. Single-digit moves in all nearby live cattle futures trade gives little indication of traders’ interest in the upcoming days. Asking prices are expected to become much more evident Wednesday morning, but the overall lack of packer interest and bids developing at this point could continue to push any active cash market trade into Thursday, or likely Friday.
Futures trade is expected mixed during the early minutes of trade Wednesday, although there is expected to be some deviation from the narrow 2- to 3-cent market shifts late Tuesday as traders try to adjust to current supplies and potential demand through the upcoming weeks. There is little positive weather premium in cattle futures as another winter system moves through the Midwest.
Although these storms may not significantly disrupt movement of cattle or plant capacities, the impact on cattle gains will accumulate over the upcoming weeks. But at this point, the futures market doesn’t seem to care, and will not likely show a significant price response unless an extreme weather system disrupts a large portion of cattle country for an extended period of time. Wednesday slaughter runs are expected near 121,000 head.