DTN Early Word Opening Livestock 08/30 06:10
Livestock Futures Geared for Mixed Opening
The cattle complex is likely to open on a mixed basis tied to follow-through
selling on one hand and short-covering on the other. Lean hog futures also seem
set to begin with uneven price action with nearby gaining on deferreds.
By John Harrington
DTN Livestock Analyst
Cattle: Steady-$2 LR Futures: Mixed Live Equiv $134.68 -0.72*
Hogs: Steady-$1 LR Futures: Mixed Lean Equiv $ 82.56 + .75**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Although trade volume generated in Nebraska Monday was quite light, any
level of country business on a Monday is noteworthy (especially when sharply
lower prices are involved). Is the early crack in feedlot resolve enough to
poison the greater cash trade through the week, or will it prove to be an
isolated bearish spasm? Needless to say, only time will tell. At the very
least, it seems safe to say that panic feedlot selling is less likely to
surface in the near term if futures manage to display greater stability.
Assuming the board can at least avoid free fall, bids and asking prices should
be poorly defined Tuesday with significant trade volume probably delayed until
Thursday or later. Live and feeder futures are set to open on a mixed basis
linked to residual selling on one hand and short-covering on the other.
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