DTN Early Word Livestock Comments 05/21 06:17
Higher Cash Hog Prices Expected Tuesday
Cattle futures tried to make a run higher Monday but came under pressure as
corn prices increased. It has been some time since higher grain prices impacted
the market. Hog futures could not maintain the strength they had earlier
Monday. The packers were not aggressive.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Higher Live Equiv: $229.22 +$0.05*
Hogs: Higher Futures: Mixed Lean Equiv: $107.63 +$0.92**
*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:
Traders were unsure of the strength of cash this week as it may be difficult
to see a repeat of last week. The strong demand ahead of the Memorial Day
weekend may have run its course as boxed beef prices were mixed Monday with
choice down $0.75 and select up $1.95. This may be the pattern for the week.
Cattle futures made new highs but could not hold onto those highs before
falling back. Four days of higher highs and higher lows may give more
confidence to traders to remain aggressive buyers. Both live and feeder cattle
came under pressure as grain futures increased. It has been some time since
this has impacted cattle futures as grain futures have not been as focused on
by cattle traders in a while. The Cattle on Feed report will be released
Friday, but it is too early for traders to position for the report.
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