Live and feeder futures should open on a mixed basis thanks to a combination of long liquidation and short-covering. Lean contracts are also expected to begin with uneven price action as front issues gain on backs.
Cattle: Steady/weak w/Wed Futures: Mixed Live Equiv $161.58 – .52*
Hogs: $1-2 HR Futures: Mixed Lean Equiv $100.37 – .17**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
To call this week’s cash cattle market “defensive” seems quite the understatement. Packer bids were lower every time feedlot managers turned around. A few live sales Thursday were as much as $9 lower than last week (i.e., $128 basis Kansas).
Is the ugly price erosion done for the week? Trade volume totals look just moderate, suggesting that more business is certainly possible. Yet psychology is so sour, both sides may be sick of negotiating. Positively, packer margins are outstanding and feedlots quite current.
Our guess is that late-week asking prices are around $130 to 132 in the South and $210 to 212. Live and feeder futures should open on a mixed basis thanks to both long liquidation and short-covering.