Live cattle lost most of what was gained last week as cash trade was disappointing. Feedlots holding out through Friday did not push packers into a corner wherein they needed to pay higher to obtain supply. Hogs fared well despite lower cash with the market adjusting after the free fall.
Cattle: Lower Futures: Mixed Live Equiv: $229.81 -1.85*
Hogs: Steady Futures: Mixed Lean Equiv: $112.63 -0.60**
* 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 are having a difficult time finding solid support. There was quite a bit of volatility last week, but the end result was limited change since the close of previous week. The market has seen extreme pressure since the last Cattle on Feed report, which was termed as bullish. This week there will be another Cattle of Feed report on Friday.
The days leading up to this report will be interesting. Of course, what might be more interesting is how early this week cash cattle trading may take place. The past few weeks have seen limited activity with last week closing with both packers and feedlots holding out.
Packers are watching the weakness of futures and boxed beef being unwilling to pay more for cattle. Feedlots are hoping futures will rebound and packers will need to step up to purchase cattle at their asking prices in order to satisfy demand. Boxed beef prices were lower on Friday with choice cuts down $4.53 and select cuts down $0.52.