DTN Early Word Livestock Comments 09/27 06:19
Follow-Through Selling Anticipated
Feeder cattle futures fell out of bed Tuesday with some contracts exceeding
losses of $5.00. Live cattle took a beating also, but not quite as dramatic.
Hogs were mixed with about as many contracts closing positive as those closing
DTN Contributing Analyst
Cattle: Steady Futures: Lower Live Equiv: $220.68 -$1.28*
Hogs: Higher Futures: Mixed Lean Equiv: $105.36 -$0.58**
*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.
Feeder cattle came under severe pressure as there was a lack of bullish
news. The focus turned to talk the Fed will likely raise interest rates before
the end of the year. That will make it more expensive to purchase and own
cattle until they are ready for the market. The other concern Tuesday was the
strong possibility of a government shutdown next week. That could hinder the
release of much-needed reports the agricultural industry relies on. The
November feeder cattle contracts posted the largest one-day decline in the life
of the contract. Further liquidation could follow Wednesday as long liquidation
may continue. Live cattle showed triple-digit losses, falling below technical
support. Feedlots may have a difficult time obtaining higher cash for cattle
this week. Limited cattle trade developed Tuesday at $290 in Iowa. Boxed beef
prices were lower with choice down $1.94 and select down $1.35.
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