DTN Early Word Livestock Comments 12/06 06:28
The Trend May Be Set for Lower Cash
The cattle complex found buying interest on Tuesday due to the discount it
was carrying to cash. However, some cash cattle trade surfaced yesterday but
unfortunately, it was lower. Hogs showed weakness as packers have not shown
much interest in buying aggressively. Weekend demand was not as good as hoped.
DTN Contributing Analyst
Cattle: Lower Futures: Lower Live Equiv: $211.89 -$1.55*
Hogs: Lower Futures: Mixed Lean Equiv: $92.12 +$0.24**
*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.
Buying interest surfaced in the cattle complex resulting in both live cattle
and feeder cattle futures basically eliminating the losses of Monday. Traders
looked to bottom-pick the market in the hopes that the oversold condition would
provide some profit on a bounce. Futures hold a discount to cash, but that
discount is now less than it was over the weekend. Some light cash trade took
place yesterday at $171 live with some dressed trade in Nebraska at $271. These
are $3 to $4 lower than last week. Feedlots are not banding together to hold
out for at least steady prices but wanted to move cattle rather than risking
further losses. Boxed beef did not help matters any with choice down $1.24 and
select down $3.70. The trend of boxed beef is lower reflecting demand weakness.
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