The cattle complex is set to open moderately higher, supported by follow-through buying and short-covering. Lean hog futures should open on a mixed basis thanks to both residual selling and short-covering.
Cattle: Cash Steady Futures 50-100 HR Live Equiv $134.69 – .49*
Hogs: Cash Steady-$1 LR Futures Mixed Lean Equiv $86.39 – .57**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
A few more token cattle bids may be thrown on the table at midweek, but significant trade volume will probably be delayed until Thursday or Friday. Initial bids could be around $114 to $115 in the South and $182 to $184 in the North. But such cheap talk will not attract much selling interest, at least not this early. Furthermore, country ideas have no doubt been steeled by Tuesday’s significant bounce in futures.
Our guess is that asking prices will start out around $120-plus in the South and $190-plus in the North. Live and feeder futures should open moderately higher, thanks to residual buying and pre-cash short-covering.