Cash cattle trade has started for the week, but increased volume is expected to develop Friday. The upward momentum, which continues through the week, is expected to add support to the entire cattle complex.
Cattle: Higher Futures: Higher Live Equiv $146.80 -1.07*
Hogs: Steady to higher Futures: Mixed Lean Equiv $ 86.33 +0.36**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Light-to-moderate trade developed in the South with live cattle selling at $118 to $119 per cwt, mostly $119 per cwt. This is generally a $1 per cwt rally from week-ago levels with underlying support in the cash cattle trade as packers continue to move to a more normal packer schedule.
With Tyson’s Kansas plant now partially back online and ramping up production to normal capacity over the near future, the need to gain access to additional cattle will likely bring support to cash cattle trade. Although packer margins have eroded over the last week, they still remain impressive and should keep packers running at full throttle in order to take advantage of current margins.
Additional cash cattle trade is needed, especially in the North, with packers only showing moderate interest up to this point, but the expectation is that prices will need to be steady to $2 per cwt higher in order to get needed business done.
Futures trade is expected mixed-to-moderately higher as follow-through support from Thursday’s gains is expected to slowly move into the complex at the end of the week. Friday slaughter runs are expected at 119,000 head.