Cattle and Hog Markets Expected to Open Mixed

Strategic Insights -

The cattle and hog markets in Kansas City are expected to open mixed on Friday, May 1, 2009, with a weak tone prevailing in the cattle futures, according to market analysts. The lean hogs, on the other hand, are expected to open firm, while pork bellies are forecast to remain flat to firm. The cash prices for cattle are likely to be above the June contract, providing support to the nearby months. However, the markets may be influenced by the swine flu outbreak, which has raised concerns about consumer acceptance of pork.

Key Takeaways:

  • The cattle futures prices are expected to open mixed, with a weak tone prevailing in the market.
  • The lean hogs are expected to open firm, due to short-position profit-taking after the market became severely oversold on Thursday's slide.
  • Pork bellies are forecast to remain flat to firm, with a possible corrective bounce following the technical oversold condition.
  • The cash prices for cattle are likely to be above the June contract, providing support to the nearby months.
  • The markets may be influenced by the swine flu outbreak, which has raised concerns about consumer acceptance of pork.
  • Excess pork could weigh on the beef markets and limit the rally in cattle markets.
  • Corn prices in overnight trading were up only slightly, which may affect the feeder cattle markets.
  • The pork cutout was lower again on Thursday, but the decline was less severe than the previous two days.
  • For the week to date, the cutout has fallen $2.65, or 4.5%.

Statistics:

  • Cattle futures prices are expected to be mixed, with a weak tone prevailing in the market.
  • Lean hogs are expected to open firm, with a possible gain of 50 to 100 points in the front month contracts.
  • Pork bellies are forecast to remain flat to firm, with a possible corrective bounce following the technical oversold condition.
  • Cash prices for cattle are likely to be above the June contract, with a possible support to the nearby months.
  • The pork cutout has fallen $2.65, or 4.5%, for the week to date.
  • Corn prices in overnight trading were up only slightly.

Sources:

  • Dow Jones Commodities News via Comtex, May 1, 2009.
  • Dow Jones Newswires, May 1, 2009.
  • Lester Aldrich, Dow Jones Newswires; 913-322-5179 lester.aldrich@dowjones.com
  • Curt Thacker, Dow Jones Newswires; 913-322-5178; curt.thacker@dowjones.com
  • Comtex News Network, Inc., 2004-2009.