DTN Early Word Livestock Comments 06/21 06:10
Another Volatile Week May Unfold
Live cattle made a token bounce on Friday, and it is unclear whether it will
continue. Packers will need to pay higher this week or futures could settle
into a sideways pattern. The direction of hogs is anyone's guess, which will
keep traders very cautious to begin the week.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $232.33 -2.09*
Hogs: Steady Futures: Higher Lean Equiv: $127.35 -4.20**
* 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
Last week certainly was a wild week with some influence stemming from
movement of grain prices, but generally the volatility came from cash and
demand. Cash was positive for cattle with prices in the North averaging $4.00
higher than the previous week while cash in the South was $2.00 higher. This
was not anticipated by most of the trade early in the week as boxed beef showed
weakness. Boxed beef continued to weaken substantially throughout the week, but
it had little or no influence on cash. Boxed beef on Friday fell $2.97 for
choice cuts and $3.63 for select cuts. For the week choice fell $8.61 while
select fell $15.26. It may be a tall order to expect higher cash this week, but
anything is possible due to continued strong demand and the fact that the
cattle industry is being looked at this week by the Senate Ag Committee to
address the price disparities.
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