Last week showed the uptrend resuming during the second half. Higher cash trade gave traders to confidence to move futures higher to at least keep pace with the strength. Nearby hogs just could not shake the bearishness of cash weakness due to plentiful hogs coming to the market.
Cattle: Higher Futures: Mixed Live Equiv: $208.33 -$0.30*
Hogs: Steady Futures: Mixed Lean Equiv: $ 96.68 +$0.11**
*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
Traders seem little interested in putting much premium in futures in anticipation of higher cash. They are content to move futures higher to keep in line with cash. Caution may be exercised this week due to the Thanksgiving holiday and a disruption in the usual business. However, business will be done. It will be a matter of how aggressive packers will be looking ahead to December and holiday demand.
Boxed beef was higher on Friday providing some stability with choice up $2.25 and select up $0.67. This should indicate to packers the need to keep an active slaughter pace. There was little to get excited about on the Cattle of Feed report. It came in mostly in line with expectations, leaving little reason for futures to gap open one way or the other. The on feed number came in at 100% compared to the average trade estimate of 99.7%. Placement were 102% compared to the average estimate of 102.4% with Marketings at 95% compared to the estimate of 96.1%.