Cash cattle trade just could not muster enough support to move higher. Disappointing cash and higher grain prices kept pressure on futures. Hog futures began the day strong but could not hold the highs as cash trade pointed lower. Packers will not be very aggressive Friday.
Cattle: Steady Futures: Mixed Live Equiv: $204.45 +$1.17*
Hogs: Lower Futures: Higher Lean Equiv: $130.68 -$1.10**
* 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
Traders were a bit disappointed over cash cattle trade on Thursday, which put a little pressure on live cattle futures. Even though purchases of cattle have been rather limited, Southern cattle traded $1.00 higher while Northern cattle traded steady with last week. Further strength is not expected Friday. Increasing boxed beef prices are improving packer margins with choice cuts up $2.06 and select cuts up $0.70.
However, as long as packers can purchase the cattle they need ahead of time without having to pay up for them, the more confident they become in holding the line on spending. Feedlots initially had high hopes for $2.00 to $3.00 higher cash, but that has dwindled as the week moves to the final day of trading and the pattern has been set. Weekly export sales were neutral, providing little in the way of market direction.