Lean hog contracts should open moderately higher thanks to follow-through buying and ideas of strengthening cash and product prices. Live and feeder cattle futures seem set to begin with mixed prices as traders remain unsure regarding cash potential.
Cattle: Steady-$2 LR Futures: 50-100 LR Live Equiv: $144.47 + .02*
Hogs: Steady-$1 HR Futures: 50-100 HR Lean Equiv $ 89.68 + .32**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
The cash cattle trade should remain slow in the early rounds with bids and asking prices poorly defined. Having said that, it seems reasonable to assume that trade volume will develop earlier than normal. Both sides would no doubt like to make up for last week’s extremely slow pace. Live and feeder futures seem staged to open mixed with deferreds losing ground to nearbys.