Live cattle futures closed lower Monday with October showing only a minor loss. The chart shows a rounded-top formation, which does not bode well for the complex. Spread trading between the October and December lean hog contracts should unwind after two days of selling October and buying December.
Cattle: Steady Futures: Lower Live Equiv: $141.98 -0.61*
Hogs: Steady Futures: Mixed Lean Equiv: $ 73.46 +0.45**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle trade was nonexistent with only some distribution of showlists. Bids or offers were not placed as buyers and sellers are unsure of where to start. Cash trade is expected to be similar to last week. Those who held out, hoping to see stronger prices and higher futures, were disappointed. More defined bids and offers should show up Wednesday.
Trading Tuesday may set the tone of the market for the next few days, making it difficult to resume the uptrend. Cash will need to show strength or futures may set back to the lows.