Live and feeder contracts should open higher, supported by follow-through buying and cash premiums. On the other hand, lean hog contracts seem likely to open on a mixed basis thanks to light bull spreading and late-week long liquidation.
Cattle: Steady w/Thurs Futures: 25-50 HR Live Equiv $160.65 – 0.54*
Hogs: Steady Futures: mixed Lean Equiv $ 92.31 – 0.26**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
The cash cattle trade turned light to moderate on Thursday at significantly lower prices. The best market test developed in the South at $134, roughly $3.50-4 lower than last week, In fact, we suspect business in Kansas and Texas is done for the week.
On the other hand, trade in the North seemed more limited (i.e., $133-135 live; $212-213 dressed), and we could see more action in this region today before buyers and sellers call it a week. Live and feeder futures seem set to open some higher, supported by spillover buying and the premium of feedlot sales.