The cattle complex should open significantly higher, supported by follow-through buying and decent packer spending in the country. Lean hog contracts are set to open moderately lower, checked by defensive carcass value and technical selling.
Cattle: Steady w/Tues Futures: 100-200 HR Live Equiv $136.80 + $1.08*
Hogs: Steady Futures: 50-100 LR Lean Equiv $ 86.09 -$1.40**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle buyers wasted little time this week in completing procurement chores before the Thanksgiving break. Trading turned at least moderate in most areas on Tuesday. While early biz in the South were $1 lower than last week (i.e., $119), late sales in the North looked nearly $1 higher.
We could see clean-up action through the day, our guess in that cash activity is essentially done for the week. Live and feeder futures should open substantially higher, supported by follow-through buying and cash premiums.