Cattle futures were under pressure as expected in response to the bearish Cattle on Feed report. The lack of any indication of cash bids left the market floundering. Hogs continued to push higher with stronger cash and cutouts.
Cattle: Lower. Futures: Lower. Live Equiv: $219.40 +$1.06*
Hogs: Higher. Futures: Higher. Lean Equiv: $102.80 +$2.37**
*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.
The cattle complex gapped lower at the open and did not look back. The positive aspect was that live cattle futures closed about a $1.00 off their lows, with feeder cattle about $2.00 off their lows. Futures moved as expected in reaction to the Cattle of Feed report, which showed higher numbers than expected and the third consecutive month of higher placements.
With more cattle and higher weights, it will take some time for these to work through the system. There were no bids or offers placed Monday, providing no indication of potential cash for the week. Boxed beef continued higher with choice up $1.09 and select up $2.46. The Commitment of Traders report showed funds as net buyers of 236 contracts bringing their net long positions to 62,177 contracts.