Cattle futures were able to perform well despite higher grain futures. There is anticipation of higher cash developing this week, which has provided support. Hogs may have run out of aggressive sellers of futures and with the jump in hog prices Tuesday, traders may buy the break.
Cattle: Higher Futures: Higher Live Equiv: $229.09 +2.16*
Hogs: Higher Futures: Mixed Lean Equiv: $119.79 +0.04**
* 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
Live cattle put in a strong day Tuesday, fueled mostly by continuing higher boxed beef prices. Some cattle being traded in the North at slightly higher prices for deferred delivery helped as well. This sets the potential for possible higher cash this week. It is Wednesday and bids and offers should surface, testing the resolve of both packers and feedlots.
Packers do not want to bid higher and are hoping the increase of grain prices again Tuesday and overnight might push feedlots to sell cattle. Feedlots will decide if it is worthwhile holding out for higher prices only to pay higher prices for the feed they need to feed them for a few more weeks.
Live cattle futures have made more than a 50% price retracement and have accomplished that with a vengeance. That level of support from futures could translate over into stronger cash.