DTN Early Word Livestock Comments 10/21 06:42
Cattle Market Uncertainty Continues
Cattle futures found their legs after a period of weakness, closing higher
for the day. Initial cash cattle traded at steady money, eliminating some
concern over potential weakness. Hogs succeeded in closing the chart gaps and
then some through the April contract due to further product weakness.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $210.26 +0.15*
Hogs: Steady Futures: Mixed Lean Equiv: $103.88 -2.40**
*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 closed higher leaving the market maintaining a sideways
trading pattern. As long as cash holds steady, futures may remain sideways.
Volatility was confined to about $1.00 swing in the market. Traders are trying
to weigh the amount of cattle available to the market with the pace of current
demand. Packers have been willing to pay steady money for cattle and are
finding willing sellers. Boxed beef was mixed Wednesday with choice down $0.85
and select up $1.27. Demand may hold or increase at these prices, leaving beef
prices mixed for the time being. Traders are cautious over the upcoming Cattle
on Feed report to be released Friday. Weekly export sales will be released
Thursday morning and may have an impact on price direction.
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