DTN Early Word Opening Livestock 10/06 06:06
Cattle Futures Likely to Bounce Higher Thanks To Modest Delivery Interest
Live and feeder futures could bounce higher on the opening as delivery fears
are checked. Lean hog issues seem set to firm early this morning, supported by
signs of strong pork demand and solid processing margins.
By John Harrington
DTN Livestock Analyst
Cattle: Steady to $2 LR Futures: 50-100 HR Live Equiv $138.82 - $1.26*
Hogs: Steady to $1 HR Futures: 50-100 HR Lean Equiv $ 91.55 + $1.64**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
It's probably safe to bank on a typically quiet Tuesday with both bids and
asking prices remaining poorly defined. A few asking prices have been thrown
out around $125 in the South and $195. Packers are well-margined, but sense
that if cut-outs continue to plummet, they will need to further lower the cost
of cattle proportionately. Feedlot managers desperately want to draw a line in
the sand, but sense that stability in futures and the boxed beef trade may have
to come first. CME officials announced only 14 loads initially tendered for
October delivery late Monday (i.e., four heifers, 11 steers, all at Worthing).
Given such relatively modest delivery interest, look for cattle futures to
bounce at least moderately higher on the opening.
For more free DTN information sent right to your email each morning - click here
to sign up for DTN Snapshot.