It is anticipated live stocks futures could follow through on Tuesday. Cattle could follow through because of lower grain prices on the overnight while hogs find support from strong cutouts.
Cattle: Higher Futures: Higher Live Equiv: $208.86 +2.14*
Hogs: Steady Futures: Higher Lean Equiv: $135.52 +4.82**
* 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
Nearby cattle contracts barely closed higher while deferred contracts showed more strength. There is some anticipation cattle supplies may tighten as the year progresses. Over the past nearly two months, cattle weights have been somewhat steady during a time when weights generally increase.
Feedlots are optimistic that they will be able to receive higher prices for their cattle this week. Boxed beef prices continue to soar with choice cuts up $2.54 and select cuts up $4.19. Orders for Labor Day are strong with the possibility that plants will not be able to satisfy all of those orders at currently slaughter rates.
There were a few cattle traded in Nebraska Monday, averaging $197. This was not enough to sufficiently test the market, but it is likely setting the stage. The Commitment of Traders report showed funds were net buyers of 11,271 contracts, increasing their net-long positions to 65,898 contracts.