It was impressive to see live cattle futures hold onto these higher prices, despite the fact that cash cattle trading late last week was disappointing. At today's April futures settlement, cash should have traded at $139 last week and again this week. In fact, at today's settlement these futures are implying cash will trade at $140 and $141 from now through April. Last week's trade was at $138.
We should see slaughter levels very close to last week's number this time around. There will be moderate bump up in two weeks as packers prepare for the holiday reduced numbers at the end of the month.
The seasonal is for the cash cattle to hold from a peak until the first week of April. Futures have a different seasonal though. They have a typical peak on March 4. For the April the seasonal break goes until March 17. On the June the break typically lasts until April 21. We suggest this year's pattern will follow the seasonal.
Lean hog futures are down about 30% from this time last year, falling to $.57 per pound in the December contract on July 13th. The recent rally has bumped prices nearly 13% off the July lows. Based on technical, seasonal and fundamental resistance, we expect this rally to fail and hog prices to decline through the end of October and possibly through year's end.