DTN Early Word Livestock Comments 10/02 06:10
Higher Cash Cattle Trade Unlikely
Live cattle futures were able to close higher after spending some time in
negative territory. The hope for higher cash supported the market. Hog futures
diverged, with contracts through the first half of the year lower while later
contracts were higher. New contract lows were again established.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Lower Live Equiv: $275.92 -$4.60*
Hogs: Lower Futures: Mixed Lean Equiv: $92.29 +$0.34**
*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:
Cattle futures closed higher on the idea that cash cattle would trade steady
to higher. Cash trading activity took place on Thursday at steady money.
However, the hope for higher cash may have been taken off the table by the
weakness of boxed beef on Thursday. Choice boxed beef fell $6.00, with select
plummeting $7.70. This certainly will not help to foster higher cash trade.
Feeder cattle posted nice gains, possibly solidifying a head-and-shoulders
bottom. The November feeder cattle contract closed above the 100-day moving
average for the first time since July 6.
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