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DTN Early Word Livestock Comments 02/24 06:15
Uncertainty May Result in Further Liquidation
Cattle futures did not show strength in reaction to the Cattle on Feed
report but were under pressure from the uncertainty of the potential strike at
the JBS Greeley plant. Hogs worked higher without fanfare, continuing to regain
more of the recent losses.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $271.44 +$2.00*
Hogs: Higher Futures: Higher Lean Equiv: $103.18 +$1.79**
*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:
Cattle futures were expected to trade higher in response to the Cattle on
Feed report, but after spending some time in positive territory, the
uncertainty of the impact of a potential strike at the JBS Greeley plant took
center stage. This overrode any other bullishness present in the market. The
strike has not yet taken place, but 99% of the workers voted for a strike and
picket signs are being made. The plant in Greeley is a major packing plant and
would disrupt a substantial supply of beef and tallow. It is uncertain whether
that would cause cattle prices to decline, as other packing plants will
continue to operate and need to increase chain speed to take up the slack.
Boxed beef prices were higher on Monday, with choice up $2.53 and select up
$3.57.
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