Live cattle futures activity took place Tuesday in even a tighter range than most of last week. With cash anticipated to trade higher this week and a strong kill planned, traders have not been willing to anticipate higher prices. Hog futures made a strong statement defying cash and a sharp drop of cutouts.
Cattle: Higher Futures: Mixed Live Equiv: $212.52 -0.68*
Hogs: Lower Futures: Mixed Lean Equiv: $ 94.65 -6.16**
*Based on formula estimating live cattle equivalent of gross packer revenue.
(The Live Cattle Equiv. Index has been updated to depict recent changes in live cattle weights and grading percentages.)
** based on formula estimating lean hog equivalent of gross packer revenue
GENERAL COMMENTS:
Cattle seem to have been facing some headwind as futures have been exhibiting some lackluster trading over the past week. There is a possibility packers will be paying more for cattle this week, but traders have been unwilling to push futures higher in anticipation of that. Consumer buying is expected to remain strong despite higher beef prices, but weakness of boxed beef at this time of year, has traders on edge.
Expectations are high, but reality can sometimes paint a different picture. Boxed beef prices Tuesday were lower with choice down $1.07 and select down $0.69. Cash activity Tuesday was virtually non-existent providing no indication of where prices will land. Cash trading is expected to take place Wednesday.
