DTN Early Word Livestock Comments 03/18 06:14
Cattle Futures May Take a Breather Tuesday
There seems to be no top in the cattle market with new highs nearly daily.
Packers seem to be short-bought, which may result in higher cash. Hogs opened
higher Monday and never looked back. Traders anticipate stronger demand will
surface.
Robin Schmahl
DTN Contributing Analyst
Cattle: Higher Futures: Mixed Live Equiv: $235.18 +$1.76*
Hogs: Higher Futures: Higher Lean Equiv: $103.46 +$0.27**
*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 posted triple-digit gains across the board Monday. New
contract highs were made in August and later live cattle futures and new
contract highs in all feeder cattle contracts. There seems to be no ceiling to
prices. Strong gains in the cash market last week and the limited volume of
cattle purchased for deferred delivery points to higher cash this week. Packers
may be short-bought and may not be able to hold out very long this week. The
feedlots will hold for higher prices as they seem to be in the driver's seat.
Packers may try to reduce slaughter but with good beef demand and the beginning
of the grilling season around the corner, they may not be able to do it as
demand needs to be met. Boxed beef prices were higher Monday with choice up
$2.89 and select up $1.58. August feeder cattle futures are knocking on the
door of $290 with demand for feeder cattle in the country very strong.
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