DTN Early Word Livestock Comments 02/09 06:14
Traders Cautious Over Cash Potential
Cattle moved through Wednesday uneventfully as traders waited to see if
there would be any development of cash activity. The WASDE report was also
assessed as to longer-term impact on feed prices and projections of beef
prices. Hogs found further support after initially opening lower. Further gains
may be seen Thursday.
DTN Contributing Analyst
Cattle: Higher Futures: Mixed Live Equiv: $198.86 +$0.91*
Hogs: Steady Futures: Higher Lean Equiv: $87.06 +$0.73**
*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.
Nearby cattle contracts were able to close slightly higher as higher cash is
expected this week. Cattle have not traded yet with both feedlots and packers
holding out again. It is possible some trade may take place Thursday as packers
need to obtain cattle and may not be able to afford holding back another week.
The WASDE report provided estimates of beef production and prices with those
being somewhat neutral. The increase in beef production of 50 million pounds
for the year was a bit of a surprise as the projection is for tighter supplies;
but the average price was raised by $0.50 to $159. Weekly export sales Thursday
may provide more price movement depending on the level of sales. Boxed beef
prices were mixed with choice up $0.48 and select down $4.17. Feeder cattle
were unable to find any solid footing, even though there continues to be strong
demand for cattle and calves in the country.
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