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DTN Early Word Livestock Comments 09/17 06:19
Cattle Futures May Struggle to Move Higher
Live cattle futures spent Tuesday in negative territory, while feeder cattle
did spend some time higher, but could not hold. The recent downtrend seems
difficult to turn. Boxed beef was very weak Tuesday. Hog futures were mixed
with weakness in the nearby months.
Robin Schmahl
DTN Contributing Analyst
Cattle: Lower Futures: Lower Live Equiv: $284.53 -$4.09*
Hogs: Lower Futures: Mixed Lean Equiv: $118.25 -$1.79**
*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:
It seems it is difficult for cattle futures to regain the losses of the last
week. Futures made a valiant effort on Monday, but the buying interest did not
carry through on Tuesday. Further cash weakness is expected this week. Packers
may not be as aggressive as they have surrounded themselves with more cattle
this week. Feedlots may have heavy cattle that will need to be moved, as it is
not profitable to hold onto them any longer. The weakness in boxed beef is
setting a negative tone, which may be difficult to overcome. Choice boxed beef
fell $5.91, and select fell $5.63. The demand is strong for feeder cattle in
the country, but further weakness in cash cattle may temper that exuberance.
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