Both cattle and hog futures were higher Wednesday. Traders felt more confident buying cattle due to continued rising boxed beef prices and the anticipation for increasing slaughter. Packers again stepped up to the plate aggressively looking for hogs to meet strong demand.
Cattle: Steady. Futures: Mixed. Live Equiv: $217.42 +$1.47*
Hogs: Steady. Futures: Higher. Lean Equiv: $102.42 +$8.26**
*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
Cash cattle did not trade higher than what took place on Tuesday, but traders anticipated continued strong boxed beef prices would keep packers aggressive, even though they are contracting cattle a couple of weeks out. It may take a few weeks for cattle supply to become current, but traders seem to believe this may take place over the next few weeks as slaughter slowly improves. Most business is done for the week with no change expected for cash.
Boxed beef prices continue to show strength with choice up $2.11 and select up $2.04. Consumers have not reached price resistance, and in some cases, they are stocking up on beef ahead of time. Feeder cattle did not post the same strength as live cattle futures. Feeder and calf prices have slumped a bit for the time being.