Lean hog futures should open moderately higher Monday, supported by the premium of the cash index and great pork processing margins. Conversely, look for the cattle complex to begin on a mixed basis thanks to a combination of follow-through selling and short-covering.
Cattle: Steady-$2 LR Futures: Mixed Live Equiv $140.03 – .54*
Hogs: Steady-$1 LR Futures: 25-50 HR Lean Equiv $ 87.12 + .60**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Our guess is that Monday will represent a slow start to a slow cattle trading week. Of course, the activity Monday will be limited to the distribution of new showlists. The mid-month offering is likely to be about steady with last week, possibly a bit larger. Yet action could remain sluggish throughout the entire week, with most retailers indifferent toward beef business right before Thanksgiving, and packers gearing down before next week’s reduction in chain speed.
Live and feeder futures are staged to open on a mixed basis thanks to a combination of residual selling interest and early-week short-covering.