Last week’s closing in the livestock complex did not paint a positive picture for this week with the exception of feeder cattle. Otherwise, some of the fundamentals for both cattle and hogs has turned more bearish. Hogs have the benefit of tighter supplies that could provide support, but such is not the case for cattle.
Cattle: Lower Futures: Mixed Live Equiv: $230.52 -0.49*
Hogs: Lower Futures: Higher Lean Equiv: $122.40 -0.38**
* 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
It seemed last week was a brutal week in cattle futures, but overall, that was not the case. Feeders closed substantially higher for the week helped immensely by falling corn prices.
Live cattle really did not change much for the week after significant volatility. Live cattle were driven lower after rallying during the first half of the week by the disappointment of cash, dismal export sales, and a plant not running on Saturday.
It certainly was different for boxed beef prices as they exploded higher, gaining $10.55 for choice and $8.57 for select cuts for the week. That certainly increases the frustration for those who raise cattle.
The bright spot is that corn prices fell dramatically since the World Agricultural Supply Demand report. But that is little consolation when the outlook for cash this week does not look any better than last week. It may be a victory if cash can hold steady with last week, but the potential for lower prices are also a possibility.