Continued pressure is likely Friday following the technical weakness developing in commodity markets as well as livestock trade. Moderate attempts of price support are expected through the day as traders try to cover short positions at the end of the week and month.
Cattle: Steady to Lower Futures: Mixed Live Equiv $136.93 -0.02*
Hogs: Steady Futures: Mixed Lean Equiv $ 69.24 -0.20**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Thursday cash cattle trade posted a few scattered trades at steady-to-lower money than was seen earlier in the week. For the most part, cash business wrapped up, but some clean-up trade trickled into the market over the last couple of days. It is likely that there may not be bids on Friday, but given the market freefall through the week, it is also possible that packers may offer a few low-ball bids in the case that some feeders with cattle still on showlists will bite rather than waiting until next week.
The weaker tone of cash markets will be huge going into early March. Fundamental supply levels have had little to do with cash market prices through the last week with the focus based on the plummeting of futures trade and concerns about further weakness in the near future. The fact that cattle futures pulled away from early limit losses Thursday is a good sign that may bring a sense of stability at the end of the week.
But live cattle market trade once again will likely be at the whims of outside market direction. With the Dow Jones Index falling 1,190 points at the end of the day Thursday, there still seems to be some strong underlying concerns that further general market pressure may develop before traders back away from the panic button. Friday slaughter is expected near 121,000 head.