The cattle complex is likely to open moderately lower, pressured by follow-through selling and fears of softening fundamentals. Lean hog issues should open some higher, supported by short-covering and constructive supply and demand factors.
Cattle: Steady-$2 LR Futures: 50-100 LR Live Equiv: $144.30 – .72*
Hogs: $1 HR Futures: 50-100 HR Lean Equiv: $ 87.60 + .71**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Light cattle trading surfaced in parts of Nebraska at prices significantly below last week (i.e., $110 live, nearly $5 lower; $178 dressed, nearly $5 to $6 lower). Yet most feedlot managers continued to pass lower packers, so it’s safe to say that the cash trade for the week has yet to be established. The trend will become more definitive sometime between late morning and early afternoon.
Look for bids to start out around $110 cash and $176 to $178, far below asking prices of $115 to $116 plus live and $185 to $187 dressed. Live and feeder futures should open moderately lower, checked by residual selling and signs of weakening cash prospects.