Live cattle futures held gains and closed higher. The strength of cash had been factored in on Wednesday, leaving little need catch up. Feeder cattle were not as fortunate being unable to turn the trend higher. Hogs just could not uncover any buying interest.
Cattle: Higher Futures: Higher Live Equiv: $211.86 -0.73*
Hogs: Lower Futures: Mixed Lean Equiv: $100.44 -0.85*
*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
Live cattle futures benefited from higher cash again Wednesday. Dressed cattle in the North traded $4.00 higher than last week while Southern cattle traded $1.00 to $2.00 higher. This certainly gives feedlots confidence to use the market to their advantage and hold for higher prices.
Maybe the premium to December and February contracts are attainable if packers continue to need cattle to keep demand satisfied. It is surprising packers were as aggressive as they were early in the week and despite the weakness of boxed beef. Choice cuts were down $1.13 with select cuts down $0.85. Weekly exports will either support the trend higher or limit price potential.