Cattle futures traders seem to be waiting for cash cattle to trade before being more aggressive. The strong move higher last week ran its course of exuberance due to cash finally trading higher. Hog futures are searching for a bottom but have been unable to find it. Futures are now oversold and ready for a bounce.
Cattle: Steady Futures: Mixed Live Equiv: $231.05 -1.28*
Hogs: Steady Futures: Mixed Lean Equiv: $127.46 +0.11**
* 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
Cattle futures closed Monday with little fanfare as feeders were a bit higher and live cattle were a bit lower. It was not the usual triple-digit gains or losses that we have now become accustomed to. There was little news for traders to go on for market direction, leaving them a little cautious in taking positions.
The cash market was not tested with only some light trade in Iowa, but nothing to hang your hat on. It is a good possibility packers will be willing to pay steady money for cattle again this week even though boxed beef prices continue to decline significantly. Choice cuts were down $2.08 with select cuts down $2.15.
Grain futures are lower again overnight which should provide some support to the cattle complex.