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DTN Early Word Livestock Comments 05/07 06:01
Cattle Traders Wait for Cash Trade
Cattle futures closed higher in most contracts, but the gains were muted as
traders wait for the cash trade to develop. Hog futures reversed the previous
day's gains as any price increases lack fundamental support.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $289.13 -$1.78*
Hogs: Lower Futures: Mixed Lean Equiv: $101.42 -$0.87**
*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 were able to hold onto gains in most contracts. Traders had
little reason to push the market significantly higher as no cash trade has
taken place this week, leaving traders cautious. The general feeling is that
cash will trade steadily this week, but cash trade has a tendency to defy
expectations. The huge increase last week was not expected. Packers' margins
are in the red, but they need to maintain slaughter to satisfy demand. Boxed
beef prices on Wednesday were lower, with choice down $2.72 and select down
$2.61.
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