DTN Early Word Livestock Comments 07/30 06:22
Lackluster Trade Expected Friday
Cash cattle trade just could not muster enough support to move higher.
Disappointing cash and higher grain prices kept pressure on futures. Hog
futures began the day strong but could not hold the highs as cash trade pointed
lower. Packers will not be very aggressive Friday.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $204.45 +$1.17*
Hogs: Lower Futures: Higher Lean Equiv: $130.68 -$1.10**
* 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
Traders were a bit disappointed over cash cattle trade on Thursday, which
put a little pressure on live cattle futures. Even though purchases of cattle
have been rather limited, Southern cattle traded $1.00 higher while Northern
cattle traded steady with last week. Further strength is not expected Friday.
Increasing boxed beef prices are improving packer margins with choice cuts up
$2.06 and select cuts up $0.70. However, as long as packers can purchase the
cattle they need ahead of time without having to pay up for them, the more
confident they become in holding the line on spending. Feedlots initially had
high hopes for $2.00 to $3.00 higher cash, but that has dwindled as the week
moves to the final day of trading and the pattern has been set. Weekly export
sales were neutral, providing little in the way of market direction.
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