Hog contracts are geared to start out higher Wednesday, supported by bull-spreading and constructive fundamentals. The cattle complex is set to open mixed Wednesday as traders cautiously gather clues of cash potential.
Cattle: Steady-$2 HR Futures: Mixed Live Equiv: $145.68 + .03*
Hogs: $1 HR Futures: 50-100 HR Lean Equiv: $ 86.50 + .86**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Beef packer inquiry could start to improve, at least in terms of more bids on the table. Furthermore, feedlot managers seem likely to become more definitive relative to asking prices. Our guess is that asking prices will start out around $117 to $118 in the South and $185 to $187 plus in the North.
Significant trade volume may not surface until Thursday or Friday. Live and feeder futures should open on a mixed basis tied to follow-through selling and cash premiums.