Robin Schmahl

Livestock futures showed red across the complex as trader support was elusive. Cattle futures may have been the recipient of quick profit-taking after the recent strength. Hogs continued their freefall with new contract lows across the complex.

Cattle futures were under substantial pressure on Thursday as traders would rather liquidate positions ahead of the Cattle on Feed report than take a chance on it. Frankly, hog futures held well despite cash and cutout weakness.

Cattle futures gapped higher as traders reacted to the Cattle on Feed report and the discount futures are carrying to cash. Hogs found buying interest likely from spillover from cattle, strong grain prices, and because they are oversold.

Cattle futures were under pressure for no specific reason other than the recent weakness of boxed beef prices and reduced export sales. Hog futures declined ahead of the Quarterly Hogs & Pigs report as there was concern it could be a negative report.

Live cattle futures were supported, keeping futures sideways. Feeder cattle futures maintained an upward trend. Hog futures showed minor losses as support is trying to be maintained.

The weakness in cattle was more the result of positioning ahead of the weekend rather than any negative event in the market. Hog futures bounced likely for the same reason, but only because traders continue to scalp the market if profits are realized rather than take long-term positions.

The market awaits Friday's World Agricultural Supply and Demand Estimates (WASDE) report as beef imports continue to climb, cash trade picks up demand and lean hog futures struggle with lower cutout values and the need for stronger pork demand.

Beef cutout values and the Feeder Cattle Index saw gains, while live cattle futures were mixed, and hog futures bounced Monday as higher pork cutout prices offered hope for market support.

The cash market is at a standstill, especially in the North this week, as many feedlots are sitting full of cattle ready to ship any day, yet bids are difficult to get. Cash prices seem to be strong in the South, yet the North faces a power struggle of who will win as we wait to see what trades later this week.

Wednesday was a strong day for the cattle markets, with feeder cattle $1.925 to $3.20 higher and live cattle up 72.5 to 97.5 cents. On the other hand, the weakness in lean hogs continued as markets traded $1.15 to $1.425 lower.