Live cattle made a token bounce on Friday, and it is unclear whether it will continue. Packers will need to pay higher this week or futures could settle into a sideways pattern. The direction of hogs is anyone’s guess, which will keep traders very cautious to begin the week.
Cattle: Steady Futures: Mixed Live Equiv: $232.33 -2.09*
Hogs: Steady Futures: Higher Lean Equiv: $127.35 -4.20**
* 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
Last week certainly was a wild week with some influence stemming from movement of grain prices, but generally the volatility came from cash and demand. Cash was positive for cattle with prices in the North averaging $4.00 higher than the previous week while cash in the South was $2.00 higher. This was not anticipated by most of the trade early in the week as boxed beef showed weakness.
Boxed beef continued to weaken substantially throughout the week, but it had little or no influence on cash. Boxed beef on Friday fell $2.97 for choice cuts and $3.63 for select cuts.
For the week choice fell $8.61 while select fell $15.26. It may be a tall order to expect higher cash this week, but anything is possible due to continued strong demand and the fact that the cattle industry is being looked at this week by the Senate Ag Committee to address the price disparities.