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DTN Early Word Opening Livestock 07/16 06:47
Mixed Trade Expected
Live cattle futures made a nice comeback Monday with August able to close
slightly higher while later contracts trimmed their losses, resulting in only
minor declines. Activity was confined to window dressing as bids and offers
were posted with no activity as usual early in the week. Early indications are
that cash should be no worse than steady this week. Hogs were the recipients of
spread trading Monday, which provided some nice support for later contracts.
February showed the greatest gain as optimism builds for next year.
By Robin Schmahl
DTN Dairy Analyst
Cattle: Steady to Higher Futures: Higher Live Equiv: $136.85 +0.05*
Hogs: Steady to Higher Futures: Mixed Lean Equiv: $ 77.76 +1.25**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
GENERAL COMMENTS:
Due to higher cash trade last week, feedlots are resolved to hold out for
higher prices this week. Cattle futures tend to support that idea with August
making a new high for the recent trend. Good packer margins may cause buyers to
be a bit more willing to make sure business gets done even if it means paying a
little more. Cash cattle trading is not expected to take place Tuesday. Mixed
cutout prices do not provide much direction. Technically, the market is in an
uptrend, but it is in overbought status, which could trigger some
profit-taking.
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