DTN Early Word Livestock Comments 12/05 06:01
Cattle Support Remains Elusive
Cattle cannot seem to find aggressive buyer interest. Futures made a nice
run higher for a brief period and then fell back with nearby months closing
$2.00 lower. Feeder cattle futures suffered greater losses. Hogs had further
support developing despite Lower cash and cutouts on Friday. Optimism has
developed for better demand and better prices.
DTN Contributing Analyst
Cattle: Lower Futures: Lower Live Equiv: $213.44 -$1.92*
Hogs: Lower Futures: Mixed Lean Equiv: $91.88 +$0.88**
*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.
Cattle futures opened lower on Monday and then made a valiant effort to move
higher bringing futures to nearly unchanged. However, selling pressure quickly
pushed contracts back to triple-digit losses. The market is in a bearish mode
and lower demand is not helping. No bids or offers of cash have been floated
yet but cash is anticipated to trade no better than unchanged with most
thinking it will be lower again this week. It is not a matter of more cattle
being available, but rather the fundamentals of slower demand. Boxed beef
prices were lower yesterday with choice down $2.74 and select down $2.66. live
cattle futures broke through and closed below support from back in March.
Feeder cattle made new contract lows across the board.
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