Cattle futures just could not hold in positive territory through the end of the day. However, that may change Wednesday as grain futures exhibited substantial losses overnight. This could be enough to trigger aggressive buying of futures. The large increase of cash Tuesday may support hog futures Wednesday.
Cattle: Steady Futures: Higher Live Equiv: $213.89 +4.03*
Hogs: Steady Futures: Higher Lean Equiv: $117.26 +1.38**
* based on formula estimating live cattle equivalent of gross packer revenue.
(The Live Cattle Equiv. Index has been updated to depict recent changes in live cattle weights and grading percentages.)
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle futures looked like they were in trouble early Tuesday as grain prices were on the rampage higher. However, grain prices turned tail with most contracts closing lower. This relieved some of the pressure that has been on the market over the past two weeks. Very strong boxed beef prices Tuesday and further losses in grains Wednesday should provide support to futures.
Traders will be cautious as the price charts still look ugly, but the bottom line is that demand is strong, and futures really should not have declined as much as they have. The April live cattle contract will close on Friday and is anticipating there will not be a jump in cash this week.