Price action: Lean hog futures traded higher within a narrow range today. For the week, hog futures built on the recent price recovery.
5-day outlook: Cash hog prices should continue to find support from the seasonal decline in market-ready hogs and carcass weights. While packer margins are tight, they are unwilling to risk losing their supplies to competing plants. If the cash hog market remains supported, lean hog futures should continue to gradually strengthen.
30-day outlook: With supplies projected to slide seasonally, consumer demand will be the key driver behind price movements through summer. With beef prices at record levels, consumers may view pork as a cost-savvy alternative. That could help keep fresh pork movement solid and chew into the record-large frozen pork stocks.
90-day outlook: The stronger dollar, especially versus the Japanese yen, could put more pressure on pork exports, which are already expected to decline this year. Exports have been a strong underpinning for cash hog prices so domestic consumer demand will have to step up to fill the void if exports do indeed weaken.
Hedgers: Carry all risk in the cash market for now.
Price action: Live cattle futures strengthened as the day progressed and ended 50 cents to $1.40 higher for the day and moderately higher for the week. Feeder cattle futures firmed late to end with slight gains for the day and the week.
5-day outlook: The market responded positively to the start of cash cattle trade at steady prices of $124 in the Southern Plains today, as nearby contracts remain at nearly a $3 discount to these prices. If boxed beef movement builds on the gains seen this week, traders will likely work more actively to align futures with the cash market.
30-day outlook: Beef movement was stronger than expected following the kickoff to the summer grilling season on a marginal price retreat from record highs. This signals consumer have responded well to lofty beef prices. But the stirring of any economic headwinds could again bring demand concerns into focus.
90-day outlook: Supplies typically begin to tighten in August into the fall, and with this year's drought-depleted herd, this could this could be even more pronounced. Also, the U.S. risk status for BSE was recently upgraded to "negligible." This could expand beef export opportunities for U.S. cattle producers.
Hedgers: Fed cattle producers should carry all risk in the cash market for now. Feeder cattle sellers and buyers should also carry all risk in the cash market for now, but feeder cattle buyers should stay in touch to establish long coverage.
Feed needs: All feed coverage has been lifted. Carry all risk in the cash market for now.