Look for hog futures to open moderately lower at midweek, pressured by follow-through selling and struggling carcass value. Live and feeder contracts also seem ready to begin moderately lower tied to residual selling pressure and uncertain cash potential.
Cattle: Steady Futures: 50-100 LR Live Equiv $130.84 – 0.18*
Hogs: $1-2 LR Futures: 50-100 LR Lean Equiv $ 85.69 – $1.67**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
GENERAL COMMENTS:
We expect to see the first signs of cattle buying interest this morning. Not that any of it may be tempting enough to generate a serious market test. But you have to start somewhere, Our guess is that asking prices will also start to take shape (e.g., $107 in the South and $167-plus in the North).
While today’s FCE auction and CME action could spark biz in one direction or the other, significant trade volume will probably be delayed until Thursday or Friday. Live and feeder contracts are likely set to open moderately lower, weighed by spillover selling and nervousness regarding cash price potential.
