Still stinging from triple-digit losses suffered on Tuesday, lean hog futures should open at least moderately lower Wednesday, pressured by follow-through selling and defensive fundamentals. The cattle complex seems set to open on a mixed basis as traders cautiously assess late-week cash prospects.
Cattle: Steady-$2 HR Futures: Mixed Live Equiv: $137.85 + .01*
Hogs: Steady-$1 LR Futures: 50-100 LR Lean Equiv: $ 89.38 -1.29**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle market monitors should at least start to see a few more preliminary bids at midweek. It sounds like some feedlot managers are pricing showlists around $116 on a live basis. Our guess is that significant trade volume will not surface until Thursday or Friday. Live and feeder cattle should open with uneven price action with the later once again gaining on the former.