DTN Early Word Livestock Comments 01/18 06:05
Cautious Start to the Week in Livestock Complex
Live cattle and hogs were the recipients of short covering into the holiday
weekend. Hog futures may resume the uptrend if slaughter pace improves.
DTN Contributing Analyst
Cattle: Lower. Futures: Mixed. Live Equiv: $212.56 +$0.97*
Hogs: Steady. Futures: Higher. Lean Equiv: $96.02 -$6.15**
*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
Cattle were able to stabilize into the extended weekend. It was a nice
rebound with likely some positioning ahead of the weekend, but it was little
consolation in light of the current market environment. Lower cash last week
did not provide much support. The early prospect is for lower cash again this
week. The problems with getting cattle slaughtered did not evaporate over the
weekend and will linger. Some feedlots needed to carry over cattle again last
week and that is costing money. Feedlots may be more anxious to move cattle,
resulting in accepting bids, even if they are lower. The increase of cattle
futures on Friday will not prompt packers to bid steady or higher. Boxed beef
prices continued higher with choice up $1.45 and select up $1.21. Packers want
to meet strong demand but are having difficulty getting the animal processed.
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