Live and feeder cattle futures should open solidly higher, supported by stronger carcass value and feedlot premium sales. Lean hog contracts are also set to open higher thanks to expectations for more constructive fundamentals.
Cattle: Steady-$2 HR Futures: 50-100 HR Live Equiv $150.16 +2.09*
Hogs: Steady-$1 HR Futures: 25-50 HR Lean Equiv $ 80.73 + .95**
* 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 market is likely to remain in neutral Tuesday with both bids and asking prices pretty much unspoken. Our guess is that buying interest won’t get too excited until Wednesday or Thursday at the earliest. While we can understand how sellers will remain bullish given the amazing strength of the stop trade in recent weeks, we can also imagine a certain country nervousness in the face of the record June discount. Live and feeder futures should open with decent strength, boosted by appreciating carcass value and the towering status of the feedlot cash trade.
