Cattle futures traded within a fairly tight range Thursday as traders assess the impact of lower cash, lighter processing and strong boxed beef demand. Hogs set themselves apart Thursday with higher cash and a potential record increase in cutouts. However, futures showed limited reaction.
Cattle: Steady. Futures: Mixed. Live Equiv: $211.59 +$1.96*
Hogs: Steady. Futures: Higher. Lean Equiv: $102.17 +$10.82**
*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.
Trading might exhibit a similar pattern as Thursday for cattle as cash business is mainly finished for the week. Traders are looking at a three-day weekend that might influence trading activity Friday. There is a large winter storm blanketing a large portion of the nation and will impact the movement of livestock and livestock performance. With some cattle already backing up in the country, this adds more frustration as increased feeding may not provide any benefit.
We are not even through the end of this week, but the potential for higher cash next week has already dimmed due to packers contracting for deferred delivery. Weekly export sales were much better than the previous week at 9,700 mt. Choice cutouts increased $2.93 with select up $1.78.