Strong early week gains have established additional market momentum that traders are expected to build upon early Tuesday. This may add some additional underlying technical support through the end of the month.
Cattle: Steady Futures: Higher Live Equiv $138.96 -0.42*
Hogs: Lower Futures: Higher Lean Equiv $ 74.95 -1.03**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Limited cash cattle market activity is expected early Tuesday, with mixed showlists and bids and asking prices remaining undeveloped early in the week. The strong triple-digit rally in live cattle and feeder cattle early in the week will likely add resolve to feedlot managers as they roll out asking prices in order to build on the momentum last week.
Even though packer margins still remain strong, the pull back from previous levels over the last couple of weeks will limit the desire to increase spending through the end of the month. Futures trade is expected generally higher with spillover support likely to develop early in the complex.
With beef stocks in freezers falling 6% from year-ago levels during the month of August, traders continue to focus on the supply tightness from 2018 levels. Beef supplies grew 4% from July, indicating seasonal demand shifts that take place at the end of the summer.