The cattle complex should open Friday morning moderately higher, supported by residual buying and positive fundamentals. Lean hog futures are likely to start out with mixed prices thanks to spillover selling and short-covering.
Cattle: Steady/Firm w/Wed Futures: 25-50 HR Live Equiv $134.74 +1.25*
Hogs: Steady-$1 LR Futures: Mixed Lean Equiv $ 85.64 + .02**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
While a few clean-up cash deals are possible in feedlot country before the weekend break, our guess is that the lion’s share of business is completed. Feedlot managers will be eager to price new showlists higher. The Feb. 1 Cattle on Feed report will be released Friday afternoon at 2 p.m. CT.
Private expectations call for placement and marketing to both be about 10% larger than last week and for total on feed to be about unchanged. Live and feeder futures should open moderately higher, supported by follow-through buying and cash premiums.