DTN Early Word Livestock Comments 12/08 06:16
Cash Cattle Trade Will Set Direction
Live cattle again moved in a narrow trading range uncertain of cash. Limited
trade took place below last week's prices, which may keep caution in early
futures trading activity. Hogs followed through to the downside but were able
to close higher in most contracts on stronger cash.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $184.16 +$3.22*
Hogs: Lower Futures: Mixed Lean Equiv: $92.37 -$5.37**
*Based on formula estimating live cattle equivalent of gross packer revenue.
(The Live Cattle Equiv. 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:
Traders just could not get excited about the prospect of cattle prices this
week after some limited cash trading took place $2.00 lower. It will be
interesting to see how packers will approach the market Thursday. They will
need to purchase cattle to procure the desired numbers for the week. However,
they may begin to slow chain speed as has been anticipated. Boxed beef prices
jumped with choice up $6.31 and select up $0.63. The jump of choice cuts,
although impressive, only reversed the loss that took place on Monday with
select showing continued weakness. Traders will be cautious over getting too
carried away only on boxed beef prices Wednesday and will wait for cash to
provide further direction. Weekly export sales may provide some direction but
may not be the focus.
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