Live cattle futures traded in somewhat of a tight range yesterday but were able to hold well and close higher in closer months. However, trade was lackluster as market participants search for price direction. Hogs continue to remain well-supported. Packers remain aggressive and continue to pay higher prices for supply.
Cattle: Steady Futures: Mixed Live Equiv: $244.70 +0.41*
Hogs: Higher Futures: Higher Lean Equiv: $141.10 -0.56**
* 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
The trading range of live cattle Wednesday was only about $1.00, which is somewhat unusual compared to the volatility we have been experiencing. At least nearby futures were able to close higher. Feeder cattle were again under pressure due to higher corn prices. Some cattle were traded at steady cash Wednesday, but again there was no large movement.
Feedlots would like to see higher cash, but the stage has been set for the week as slaughter was revised lower and packers were able to purchases sufficient supply at steady prices. After two days of lower boxed beef prices, providing concern that prices may have topped, boxed beef moved higher Wednesday. The increase of choice cuts was only $0.04 while the increase for select cuts was $1.69.
Weekly export sales will be released Thursday morning. Some concern has risen over the slowing of imports by China. During the month of May, they imported 789,000 metric tons of beef compared to 922,000 in April.