Sharp market losses in lean hog futures have sparked increased concern that additional weakness may develop through late summer. This is sparking widespread liquidation in nearby and deferred trade.
Cattle: Steady Futures: Mixed Live Equiv: $138.36 +1.14*
Hogs: $1 Higher Futures: Lower Lean Equiv: $ 92.01 +3.05**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
GENERAL COMMENTS:
Limited development in cash cattle trade through the early part of the week is expected to create sluggish overall interest from both sides Wednesday morning. Bids and asking prices are likely to be few and far between through the first part of the day, although packer interest is expected to improve slightly as the day continues.
Although there is likely to be some emphasis on trading cattle before the end of the month, the wide gap between asking prices and bids will limit overall trade activity at this point. Although there were a few bids at $183 per cwt on Tuesday in the North, interest in the South remained quiet, which is the opposite of what is typical through the first half of the week.
Futures trade is expected mixed midweek with live cattle futures expected to hover in a narrow trading range through most of the morning, while the potential for additional underlying gains in feeder cattle will depend more on the direction of grain trade rather than moves in live cattle trade at the end of July.
