Cattle rebounded Tuesday due to an oversold market with traders exiting short positions. The minimal downtime of the Nebraska JBS plant was positive. Hogs continues to remain on the defensive even though cutouts rebounded.
Cattle: Steady Futures: Mixed Live Equiv: $236.25 -$1.83*
Hogs: Lower Futures: Higher Lean Equiv: $112.46 +$4.08**
* 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 were finally able to post strong gains after falling over the period of three weeks. It is possible a spike low might have been established based on the action Tuesday. However, the strength will need to continue to confirm that technical action.
Without cash cattle trading Tuesday and continued weakness of boxed beef, the market may remain vulnerable to limited upside potential. There should be some cash activity developing Wednesday, but it is expected to be light. Boxed beef prices continue to decline with choice cuts down $3.04 and select cuts down $1.54.