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The technical action was a bit negative yesterday but the cash fundamental news seems to be improving some and a minor jump in beef prices could spark more aggressive buying and short-covering soon. Economic sensitive markets such as sugar, corn and copper have attracted significant buying interest from longer-term investors recently and cattle may soon begin to attract some of this interest. Steer weights are coming down quickly from the high levels of earlier this year and a better marketings pace may be part of the reason. The pipeline activity may pick up steam for the next several weeks and this may help provide underlying support. June cattle closed slightly lower on the session yesterday after an early rally to the highest level since April 23rd failed to attract new buying interest and some profit-taking selling set in. Expectations for cash to trade $1.00-$2.00 higher this week and USDA news of increasing exports ahead helped support the market but weakness in the stock market and uncertainty on demand helped keep the trade choppy. Cash markets were bid at $82.00-$83.00 with offers at $87.00 as compared with $84.00 last week. The showlist is smaller this week after last week’s trade helped clean-up any backlog. There was talk that packers are pulling cattle bought last week quickly to plants and talk that some packers are short bought against bookings. Slaughter came in at 129,000 head which was well above trade expectations and may be seen as a positive force. This may suggests that packer demand is picking up. This brings the total for the week so far to 255,000 head, up from 254,000 last week at this time but unchanged from 255,000 a year ago. Boxed beef cutout values were up $1.06 at mid-session yesterday and closed 99 cents higher at $146.24. This was down slightly from $146.43 a week ago.

TODAY’S GUIDANCE: June cattle rejected a move through the 100-day moving average yesterday and the hook reversal is a short-term negative signal but futures are still discount cash and cash is expected to trade $1.00-$2.00 higher this week. Buying support comes in at 82.82 with 84.95 as initial upside target.

This content originated from – The Hightower Report.