Live cattle and hogs were the recipients of short covering into the holiday weekend. Hog futures may resume the uptrend if slaughter pace improves.
Cattle: Lower. Futures: Mixed. Live Equiv: $212.56 +$0.97*
Hogs: Steady. Futures: Higher. Lean Equiv: $96.02 -$6.15**
*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 were able to stabilize into the extended weekend. It was a nice rebound with likely some positioning ahead of the weekend, but it was little consolation in light of the current market environment. Lower cash last week did not provide much support. The early prospect is for lower cash again this week. The problems with getting cattle slaughtered did not evaporate over the weekend and will linger.
Some feedlots needed to carry over cattle again last week and that is costing money. Feedlots may be more anxious to move cattle, resulting in accepting bids, even if they are lower. The increase of cattle futures on Friday will not prompt packers to bid steady or higher. Boxed beef prices continued higher with choice up $1.45 and select up $1.21. Packers want to meet strong demand but are having difficulty getting the animal processed.