DTN Early Word Livestock Comments 12/10 06:24
Mixed Trading Activity Anticipated Tuesday
Cattle futures were generally supported Monday by higher boxed beef and the
potential for steady to higher cash this week. Traders may remain cautious over
the potential of demand through the end of the year. Hogs closed under pressure
in most contracts but remained in an uptrend.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Higher Live Equiv: $225.74 +$1.59*
Hogs: Higher Futures: Higher Lean Equiv: $99.49 +$2.47**
*Based on the formula estimating live cattle equivalent of gross packer
revenue. (The Live Cattle Equiv. The 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:
The February live cattle contract showed the most volatility Monday with a
price swing of $2.00. Futures closed higher, but not with conviction. Traders
will be cautious unless they continue to see strong boxed beef prices and
further aggressiveness by packers. Packers are positioning themselves for the
holidays and may have enough cattle purchased ahead, limiting the need to bid
up the cash market. Cattle are available and are at record weights. However,
beef continues to be absorbed in the market as demand remains good. Boxed beef
prices were higher Monday with choice up $2.10 and select up $2.61. Feeder
cattle futures traded in line with live cattle. A few contracts closed lower,
but most closed moderately higher with the potential to regain the recent
weakness. Demand for feeder cattle remains strong.
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