The cattle complex should open on a mixed basis, partly tied to best spreading and/or the unwinding of bull spreads. Lean hog issues seem set to also begin narrowly mixed thanks to follow-through selling and short covering.
Cattle: Steady Futures: mixed Live Equiv $131.02 – 0.01*
Hogs: $1-2 LR Futures: mixed Lean Equiv $ 87.36 – 0.04**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
There’s little reason to think that this won’t be a typically slow Tuesday in the cattle market. Optimistic feedlot managers will be pointing at board premiums and cautious packers will be highlighting the lackluster wholesale beef trade. With both sides expressing such early week stubborn, we don’t expect much definition in terms of bids or asking prices.
Depending on how short bought packers feel, significant trade volume could be delayed until Thursday or Friday. Live and feeder futures seem set to open on a mixed basis thanks to a slow combination of follow-through buying and profit taking.