Live and feeder contracts should open on a mixed basis with traders torn between cash premiums and signs of struggling beef demand. Lean hog issues should also begin with uneven price action with nearbys gaining on deferreds.
Cattle: Steady Futures: Mixed Live Equiv: $135.83 -1.47*
Hogs: Steady-$1 LR Futures: Mixed Lean Equiv: $ 89.00 + .21**
* 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 market starts the week with plenty of unanswered questions, questions like how many steers and heifers actually traded last week, and what did weighted average prices finally look like. Trade volume on Friday seemed unusually small, but it will be very interesting to see how mandatory summaries read later Monday morning.
For the most part, live sales were marked $1 to $2 lower on Friday (i.e., $110 to $111). Most dressed deals were booked at $173, $2 to $4 lower. But again, the big question is exact trade volume. Activity Monday will be limited to the distribution of new showlists. We assume the new offerings will be larger, thanks to unsold numbers carried over.
If limited business means that packers are now especially short-bought, we could see cash trading surface somewhat earlier than normal. Live and feeder futures seem geared to open on a mixed basis thanks to the odd combination of cash premiums and struggling beef cutouts.