Torn between lower cash sales and higher carcass value, lean hog futures seem likely to open on a mixed basis Thursday. Live and feeder contracts should open moderately higher, supported by follow-through buying and cash premiums.
Cattle: Steady-$2 HR Futures: 50-100 HR Live Equiv: NA*
Hogs: Steady-$1 LR Futures: Mixed Lean Equiv: NA**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle buyers could certainly become more active Thursday, but it will no doubt take higher bids than we saw Wednesday (i.e., $113 dressed in the North; $112 to $114 live in the South) in order to generate significant selling interest. In other words, firm asking prices of $119 in the North and $120 to $122 in the South are likely to stand tall until sometime Friday, which of course would mean yet another round of late-week cash business. Live and feeder futures seem set to open moderately higher thanks to residual buying interest and recent cash premiums.