Live and feeder contracts are expected to open moderately higher, supported by follow-through buying and large cash premiums. Look for lean hog contracts to trade moderately lower in the early going, checked by residual selling interest and lackluster fundamentals.
Cattle: Steady-$2 HR Futures: 25-50 HR Live Equiv $151.18 + .81*
Hogs: Steady Futures: 25-50 LR Lean Equiv $ 86.37 – .50**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
GENERAL COMMENTS:
Is the cash cattle trade set for another round of midweek magic? To be sure, Wednesdays have been close to cash heaven for nearly a month. While time will tell, the impressiveness of this recent pattern will at least encourage sellers to dig in their heels through the day with sharply higher asking prices (e.g., $130 to $131 in the South; $214 in the North).
Bullish hopefuls will also be keeping an eye on the FCE internet auction. Live and feeder futures should open moderately higher, supported by follow-through buying and generally positive cash expectations.
