DTN Early Word Livestock Comments 05/14 06:21
Higher Futures Expected Tuesday
The cattle complex closed mixed Monday as traders could not settle on price
direction. Feeder cattle were stronger but failed in the attempt to turn the
market higher. Hogs could not hold early strength as demand concerns continued
to pressure the market.
Robin Schmahl
DTN Contributing Analyst
Cattle: Lower Futures: Higher Live Equiv: $219.22 +$2.80*
Hogs: Higher Futures: Higher Lean Equiv: $108.26 +$2.67**
*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 may get a boost Tuesday based on the strength of boxed beef
on Monday. Choice cuts jumped $4.38 while select increased $3.01. Retail demand
over the weekend must have been strong with restocking needing to be done.
However, moving live cattle futures out of the sideways trading range may take
more than that. Technically, futures are poised to break lower if traders do
not increase their buying interest. The early anticipation is for cash cattle
to trade lower this week. The packers may not need to be as aggressive as they
had purchased cattle ahead the past few weeks. Feeder cattle futures did not
make a lower low Monday, but they also failed to hold the early strength,
keeping the market in a downtrend.
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