Lean hog futures seem set to open moderately higher, supported by follow-through buying and stronger carcass value. The cattle complex should open lower, checked by follow-through selling and supply concerns.
Cattle: Steady Futures: 50-100 LR Live Equiv: $149.70 + 071*
Hogs: Steady-$1 HR Futures: 50-100 HR Lean Equiv $ 76.55 + $2.26**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
GENERAL COMMENTS:
Our guess if that cattle traders will experience a typically quiet Tuesday with both sides trying to weigh higher cut-outs against lower futures. Having said that, these are days when trade volume is hard to track (e.g., how did Nebraska trade as many as 52,000 head last week?).
Between different delivery terms and basis consideration, it’s been difficult to get a daily count. Specific bids and asking prices for spot biz may be tough to identify this early in the week. Wednesday or Thursday may be a better bet.
The closer we get to Memorial Day, the more of a challenge it will be for producers to ignore stubborn-born discounts. Live and feeder futures are likely to open moderately lower, pressured by spillover selling and mounting beef supplies.
