Live and feeder futures are staged to open higher, supported by residual buying interest and ideas of further cash strength. Lean hog contracts should also open with a firm undertone and constructive fundamentals.
Cattle: Steady-$2 HR Futures: 25-50 HR Live Equiv $131.60 + .01*
Hogs: Steady-$1 HR Futures: 25-50 HR Lean Equiv $ 85.79 + .59**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
GENERAL COMMENTS:
The cash cattle trade should remain generally slow Wednesday. A scattering of initial bids is possible, but it seems extremely unlikely that anything will come within tempting distance given substantial higher asking prices around $122 in the South and $195 in the North. If the board gives producers no serious reason to question their leverage, significant trade volume will most probably be delayed until Thursday or Friday. Live and feeder futures should open moderately higher thanks to follow-through buying and cash optimism.
