Strong gains in the financial markets Thursday provided some support to the livestock complex. Most of the trading activity was the result of traders looking ahead to the reports to be released Friday.
Cattle: Steady Futures: Higher Live Equiv: $224.56 -1.21*
Hogs: Steady Futures: Mixed Lean Equiv: $111.51 -2.63**
* 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 mixed, but higher in most contracts. Price strength during the day gave way as traders decided to even up positions before the final trading day ahead of the Cattle on Feed report. Cash cattle trading in line with Wednesday provided little to get excited about as cattle in the South traded steady with last week while the average trade in the North was $1.00 lower. There may be some cash traded Friday, but both packers and feedlots may wait for the results on the Cattle of Feed report to be released after the close of trading.
The average trade estimate for on-feed numbers is 97.9% or 11.155 million head. In order for cattle to move higher and regain some of the losses since the previous report, on-feed numbers may need to be lower than anticipated on this report. Slowing demand and lower beef prices may offset some bullishness that could be seen from the numbers that will be released. Boxed beef continues to fall with choice cuts down $2.23 and select cuts down $0.51 Thursday.