Cattle continue to struggle with a good day being a mixed close in futures. It is doubtful any cattle will be traded Tuesday, but the anticipation is packers may bid lower. Hogs continue to reach for the sky with no sign of price resistance.
Cattle: Lower Futures: Mixed Live Equiv: $244.92 -$0.73*
Hogs: Steady Futures: Mixed Lean Equiv: $141.45 +$1.44**
* 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
Boxed beef closed lower for the second consecutive day with choice down $0.38 and select down $2.56. Traders and packers will be paying close attention to this as a slide had been anticipated after the Memorial Day holiday was past. There is no doubt demand remains strong, but strong demand does not mean prices will continue to increase.
Demand can remain strong even at lower prices or increase as beef become less expensive. There was no cash business done Monday, nor was there any anticipated. Showlists were distributed, providing some indication of what might be available.
The weakness of boxed beef may result in lower packer bids even though there is a widespread between cash and boxed beef. Packers will use the weakness as the reason to hold back on bids and hopefully be able to procure the needed cattle for the week.
The Commitment of Traders report showed funds as net sellers of 7.708 futures contracts for the week ended June 1. This reduced their net-long positions to 50,200 contracts.