Early morning trade is expected to try to bring some stability to the recent pressure seen in all cattle markets Thursday. The aggressiveness of the losses was surprising as traders focused on growing market uncertainty through the upcoming weeks.
Cattle: Steady Futures: Mixed Live Equiv $143.83 -0.05*
Hogs: Steady Futures: Higher Lean Equiv $83.76 +0.10**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Following cash cattle trade that developed over the last two days, the lion’s share of needed cattle sales appear to be already in the books. This is somewhat unusual during a “cattle on feed report week” as typically both sides are more focused on the direction of cattle inventory levels and placements before becoming moderately aggressive.
The current tight supplies of cattle available and need for packers to secure cattle numbers for the upcoming weeks sparked early trade. But steady money at best with last week was all that could be seen as trade in the South continued at $124 per cwt live basis. Dressed trade in Nebraska held out until Thursday afternoon with prices at $198 to $199 per cwt, generally steady to $1 lower than last week.
When all the dust clears, it is expected that cattle markets will remain steady for the week, which creates concerns that the much anticipated tight supplies of cattle through the first quarter of the year have been unable to show any significant support during January.
Futures trade is expected weak early Friday morning as traders still remain concerned about the aggressive triple-digit losses that flooded the market Thursday. This will likely bring about a combination of follow through end of the week selling pressure and late week short covering, which may lead to moderate to wide shifts in trade as traders look for additional direction from the cattle on feed report Friday afternoon.
Friday slaughter runs are expected near 121,000 head.