DTN Early Word Livestock Comments 03/14 06:20
Cash Trade Will Provide Direction
Nearby live cattle contracts were the only ones showing a positive close
Thursday. The rest of the livestock complex closed lower with hog futures
showing substantial losses. Losses in the equity markets seems to have played a
part in the bearishness.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $234.37 -$1.14*
Hogs: Lower Futures: Mixed Lean Equiv: $103.14 +$2.71**
*Based on the formula estimating live cattle equivalent of gross packer
revenue. (The Live Cattle Equiv. The index has been updated to depict recent
changes in live cattle weights and grading percentages.
** based on formula estimating lean hog equivalent of gross packer revenue.
GENERAL COMMENTS:
Live cattle futures posted strong gains during the day Thursday as the
October and later live cattle futures made new contract highs before slipping
back. The inability to hold may have been due to substantial pressure in the
equity markets, which increased the uncertainty of a recession. This did not
change the minds of feedlot owners as they held for higher cash, which resulted
in no cash cattle being traded during the day. It is difficult to know whether
the packers need to be aggressive this week or if they can hold and purchase
less cattle to manage costs. Boxed beef prices were lower with choice down
$1.41 and select down $0.06. This weakness should not have an impact on cash.
The new contract highs in both live and feeder cattle futures keep technical
traders active. Fundamentally, the market has strong support.
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