Look for the cattle complex to open moderately lower, checked by follow-through selling and defensive cutouts. Lean hog contracts are set to open solidly higher thanks to signs of improvement fundamentals.
Cattle: Steady-$2 HR Futures: 25-50 LR Live Equiv $130.93 – 1.85*
Hogs: Steady-$1 HR Futures: 50-100 HR Lean Equiv $ 85.96 + 2.46**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle buyers should start to make more of a presence Thursday as they position to secure short-term slaughter. Initial bids will be around $116 in the South and $187 to $188 in the North. Feedlot psychology should be pumped by news of higher internet sales reported Wednesday. Asking prices are likely to be around $122 in the South and $195 in the North.
Such a wide spread between bids and asking prices may mean that significant trade volume will not surface until sometime Friday. Live and feeder futures seem set to open moderately lower, pressured by residual selling and defensive action in the box trade.