Cattle futures fell on Friday in anticipation of a negative Cattle of Feed report, suffering mostly triple-digit losses. However, such was not the case, which may bring a rebound Monday. Hogs tried to hold their ground after two days of plummeting prices. Support might be developing.
Cattle: Steady Futures: Higher Live Equiv: $211.24 +0.68*
Hogs: Steady Futures: Mixed Lean Equiv: $105.24 -0.05**
*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 fell sharply into the close as fear of a bearish Cattle on Feed report swept through the market. That fear was unfounded as the report may be considered somewhat friendly. Oct. 1 on feed numbers were 99% of last year slightly below the average traded estimate of 99.3%.
Placements were 97% of a year ago compared to the average trade estimate of 101.4%. Marketings were 97% compared to the average trade estimate of 97.2%. The most striking aspect of the report is that placements were significantly lower than anticipated.
Although cattle and calves on feed were 1% below a year ago, it was the second highest inventory for the October report since the series began in 1996. The report is expected to trigger buying interest from traders due to actual numbers versus estimates.
Further support may be seen from higher boxed beef prices on Friday with choice up $1.16 and select up $0.39. Cash is expected to be quiet as usual for the beginning of the week.