Lean hog futures seem geared to open Thursday moderately higher, supported by follow-through buying and appreciating carcass value. Conversely, expect the cattle complex to begin no better than mixed as traders continue to position ahead of cash news and the release of the Jan. 1 Cattle on Feed report.
Cattle: Steady-$2 HR Futures: Mixed Live Equiv $131.80 – .02*
Hogs: Steady-$1 HR Futures: 25-50 HR Lean Equiv $ 87.67 + .96**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle buying interest should slowly start to become more evident Thursday. Look for some preliminary bids around $120 in the South and $192 to $193 in the North. On the other hand, asking prices are likely to remain firm (i.e., near $125 in the South, and close to $200 in the North), a fact that could easily delay the development of significant trade volume until sometime Friday. Live and feeder futures should open on a mixed basis as the board positions ahead of late-week cash and on feed news.