DTN Livestock Open: Hauler Hours Extended Again

    ©Debra L Ferguson Stock Photography

    Cattle futures took it on the chin Monday, most likely due to the market taking a breather after last week’s strong run higher. Hogs went back to posting a divergence between the close months and deferred months as December remains close to cash.

    Cattle: Higher Futures: Mixed Live Equiv: $207.53 -$1.25*
    Hogs: Steady Futures: Higher Lean Equiv: $94.52 +$3.73**
    *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

    GENERAL COMMENTS:

    Traders had nothing to go on Monday, so some profits were taken just in case the omicron virus becomes a greater economic issue. This uncertainty will make traders nervous. This could also impact cash trading this week. Packers seem to be current without having many forward contracted.

    This would lend itself to the idea they will need to be more aggressive again this week. They have limited bargaining power as long as they keep a strong slaughter pace and are purchasing cattle mostly as they need them.

    There is anticipation cash will be at least $1.00 higher this week, but there is strong potential for more than that. The Commitments of Traders report showed funds increasing their long futures positions by 13,235 contracts to a net-long futures position of 65,461 contracts. The Federal Motor Carrier Safety Administration has extended the hours of service for livestock haulers through Feb. 28, 2022.

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