The cattle complex should open at least moderately higher, supported by follow-through buying and technical bullishness. Look for lean hog futures to begin with mixed price action as traders start to position ahead of the late-month inventory.
Cattle: Steady-$2 HR Futures: 50-100 HR Live Equiv $130.64 – .19*
Hogs: $1-2 LR Futures: Mixed Lean Equiv $ 81.59 unch**
* 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 start to improve Thursday with opening bids around $104 to $105 in the South and $164 to $165 in the North. Yet it goes without saying that asking prices are being hiked as we speak, thanks to the way live futures broke to new highs at midweek. Our guess is that feedlot managers are now pricing ready steers and heifers around $110 plus in the South and $172 to $174 plus in the North.
Given this new bullish stubbornness, significant trade volume could easily be delayed until sometime Friday (even after cow news is released at 2 p.m. CDT). Live and feeder futures should open at least moderately higher, supported by follow-through buying and technical considerations.