DTN Early Word Livestock Comments 04/23 06:24
Rebound of Futures Likely Friday
It was not a good day Thursday in the livestock complex as increasing grain
prices put substantial pressure on futures. Bright spots have been few this
week, but the possibility of lower grain prices Friday might provide some
DTN Contributing Analyst
Cattle: Lower Futures: Higher Live Equiv: $208.32 +1.29*
Hogs: Steady Futures: Higher Lean Equiv: $121.21 +1.06**
* 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
Feedlots were looking at the market Thursday with only one eye open, and
they were squinting with the open eye as well. It was painful to watch as
cattle futures posted triple-digit losses in numerous contracts while corn
prices rocketed higher. Cash traded lower and packers were able to extend their
purchases further into the future. This does not bode well for the near term.
Boxed beef closed nicely higher Thursday, but although friendly, the focus was
on grain prices. The weekly Export Sales report was not even enough to stem the
swelling tide of weakness even though sales were 57% higher than last week and
38% higher than the previous week. Cash trading is mostly done for the week,
setting a bearish tone for next week. There may be bright spot Friday. Some
short-covering may take place and overnight corn futures are nearly eliminating
half of Thursday's limit gains.
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