DTN Early Word Livestock Comments 10/14 06:15
Cattle Futures May Take a Breather After Recent Gains
There is no ceiling in the cattle market with new contract highs continuing
daily. The strength Monday was due to continued optimism over higher prices.
Hogs continued to struggle with nearby contracts higher and later contracts
lower. Fundamental support remains elusive.
Robin Schmahl
DTN Contributing Analyst
Cattle: Higher Futures: Mixed Live Equiv: $265.03 -$0.11*
Hogs: Higher Futures: Mixed Lean Equiv: $109.79 -$0.83**
*Based on the formula estimating live cattle equivalent of gross packer
revenue. (The Live Cattle Equiv. The 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.
GENERAL COMMENTS:
The October live cattle contract is the only one that has not moved to a new
high, as it remains close to cash, with about two weeks remaining to trade. The
rest of the complex has yet to find a price ceiling. The concern over tight
cattle supplies is fueling the trade optimism. Higher cash trade last week
indicates feedlots were short-bought and needed to step up near the end of the
week. Demand seems to be holding despite high beef prices. A rebound in the
equity markets also provided some support. Boxed beef prices were mixed, with
choice down $1.66 and select up $3.36. Feeder cattle remain in strong demand
with higher prices paid for various weight groups at auctions, with most prices
carrying a premium to the board price.
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