Lean hog contracts should open moderately higher, supported by short covering and the cash market premium. On the other hand, the cattle complex is likely to begin with mixed priced action tied to spillover selling and the premium status of feedlot sales.
Cattle: Steady Futures: mixed Live Equiv $130.28 – 0.02*
Hogs: Steady-$1 HR Futures: 25-50 HR Lean Equiv $ 90.83 + 0.10**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle buying interest could slowly begin to surface this morning with opening bids probably around $116 in the South and $185-187 in the North. If feedlot managers dig in their heels regarding asking prices close to $122 in the South and $192-plus in the North, significant trade volume could easily be delayed until Friday. Live and feeder futures are likely to open on a mixed basis thanks to residual selling and pre-cash short covering.