DTN Early Word Livestock Comments 03/24 06:11
Trader Positioning Likely Ahead of Weekend
Live cattle closed slightly lower as mixed cash trading did not develop any
excitement. Mixed boxed beef also continues to be the pattern. Hog futures
again made new lows but were able to bounce as short-covering took place after
the recent large decline.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $209.53 +$0.53*
Hogs: Lower Futures: Mixed Lean Equiv: $87.58+0.44**
*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.
There had been some hope cattle would shrug off the mixed cash trade that
had developed on Wednesday, but such was not the case. Although cash trading
activity was rather light again Thursday, it still remained mixed with prices
averaging $1.00 lower in the South and $1.00 higher in the North. Anything else
that trades the rest of the week will likely follow the same pattern. Boxed
beef continues to run mixed with choice up $1.48 and select down $0.93. With
beef packer margins below last year and the three-year average. Packers will
attempt to improve those margins by trying to purchase cattle at reduced
prices. Weekly export sales were 5% better than last week at 18,600 MT, but
still ran lower than desired to provide strong support under the market. Total
beef in inventory for the month of February was 500.2 million pounds, down 6%
from a year earlier.
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