Expect lean hog contracts to begin in a mixed basis thanks to a residual of selling on one hand and short covering on the other. The cattle complex shoulld also begin with uneven price action tied to follow-through selling and the premium status of recent feedlot sales.
Cattle: Steady Futures: mixed Live Equiv: $136.05 + 0.54*
Hogs: Steady-$1 LR Futures: mixed Lean Equiv $ 89.38 + 0.83**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle potential should start to take shape this morning with the preliminary surfacing of a few bids and asking prices. Our guess is that asking prices will start out around $114-plus in the South and $176-178 dressed in the North. Significant trade volume could easily be delayed until Thursday or Friday. Live and feeder contracts are staged to open on a mixed. basis thanks to a combo of follow-through selling and midweek short covering.