The underlying tone in the livestock market remains weak, but the ability to move off of market lows Tuesday is helping to rekindle light-to-moderate buyer interest in the complex.
Cattle: Steady Futures: Mixed Live Equiv: Unavailable*
Hogs: Lower Futures: Mixed Lean Equiv: Unavailable**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cash cattle activity remains quiet going into midweek with just a few token asking prices early in the week. Even these asking prices remain vanilla, at $108 in the South and $178 to $180 in the North. Packer interest may slowly develop through the day, but for the most part, it is not expected that active moves will develop until later in the week.
The extreme discount between beef values and cash markets that has developed the last two and half weeks should limit additional short-term pressure in cash trade, but boxed beef values have also started to soften, giving back a portion of the overblown premiums, which developed following the Tyson plant fire in Kansas.
The U.S and Canadian cattle report released Tuesday afternoon posted generally steady cattle numbers from year-ago levels. Although numbers were slightly lower, it was not statistically significant as percentage levels did not change. This gives a little bit clearer view that the weather conditions and flooding during the spring months did not have a significant statistical impact on overall cattle numbers.
Cattle futures are expected mixed in limited early trade, although the underlying weaker tone Tuesday may cause additional pressure as traders continue to test last week lows with October futures still unable to consistently hold prices above $100 per cwt.