DTN Early Word Livestock Comments 02/07 06:04
Hog Futures Search for Support
Cattle futures closed Monday on another positive note. Live cattle were
carried higher on the expectations for higher cash prices again this week.
Feeder cattle pushed higher, nearing chart resistance. Hogs came under severe
pressure and struggling cutouts are not helping.
DTN Contributing Analyst
Cattle: Higher Futures: Mixed Live Equiv: $198.94 +$1.40*
Hogs: Higher Futures: Lower Lean Equiv: $89.39 +$2.53**
*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.
Live cattle are being pushed higher due to strong expectations of higher
cash again this week. With light cash trading activity last week, trade should
take place earlier this week as packers most likely will not wait until the end
of the week to do business. They need cattle to maintain slaughter pace. The
April contract made a new contract high, keeping the bullishness alive and
well. Boxed beef prices moved higher with choice gaining $1.83 and select up
$2.11. Stronger boxed beef may cause packers to become more willing buyers. New
showlists have not been distributed, providing no indication of cattle
available to the market. Feeder cattle continued their uptrend pushing up near
price resistance from Jan. 4. Futures should break though the overhead chart
resistance, which would trigger further buying interest.
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