DTN Early Word Livestock Comments 06/24 06:21
Price Support for Livestock Futures Remains Elusive
The livestock complex is struggling as it attempts to find stability.
Falling grain prices have not been able to provide solid support to the market.
Traders will be looking to the Hogs and Pigs report Thursday and the Cattle on
Feed report Friday for some direction.
DTN Contributing Analyst
Cattle: Higher Futures: Mixed Live Equiv: $225.22 -$2.77*
Hogs: Lower Futures: Lower Lean Equiv: $114.52 -$0.01**
* 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
Just when we thought livestock markets were finally finding some support
this week, the bottom fell out again. Traders were disappointed there was very
little activity in cash cattle trade, leaving them wondering if the higher cash
earlier this week will hold or possibly increase. The continued decline of
boxed beef also provides some negative influence on the market. Boxed beef is
falling with a vengeance as choice cuts were down $3.70 and select cuts down
$4.34. Packers may pay higher this week to purchase the cattle they need, but
that may come to an end if supply is beginning to back up in the market. Export
sales will provide some indication whether international demand continues to
remain strong and may set the tone for trading Thursday. On the other hand,
futures trading activity may be somewhat subdued due to the Cattle on Feed
report that will be released Friday afternoon. The Senate Ag Committee began a
hearing Wednesday into the meatpacking industry due to imbalance that has been
seen in the market between cash cattle and boxed beef prices.