Possible consolidation in cattle futures.
Cattle: Steady Futures: Mixed Live Equiv: $153.64 -0.27*
Hogs: Lower Futures: Higher Lean Equiv: $93.99 +1.01**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle futures just could not break out to the upside after a few days of consolidation. At least, many believe it is consolidation. However, the market may have run out of steam with strong potential for the market to establish a top. Futures are overbought and cut-outs may be wavering. A market cannot go up forever without a correction.
Retail demand may be saying “enough is enough.” The Tyson plant that was damaged by fire in August is expected to be in full operation by mid-December. This will not have any impact on the market due to overall slaughter not really affected much after other facilities took up the loss of capacity.
There was no trading activity yesterday as expected with no bids or offers officially posted. Strong beef export sales provide support to the market with the export sales report on Friday showing the largest weekly export sales total since April 11 and the second-largest for the year.