DTN Early Word Livestock Comments 02/29 06:16
Cattle Futures May Show Further Weakness
Cattle futures were under pressure Wednesday with feeder contracts showing
the greatest effect. The market may be making a price correction, which would
change market sentiment. Hogs were able to eke out a higher close again after
first making new highs in some contracts.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $223.32 +1.15*
Hogs: Higher Futures: Mixed Lean Equiv: $98.15 -$1.53**
*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.
Cattle had a tough Wednesday with futures generally opening lower and
remaining that way most of the day. Some cash cattle traded in the South at
even money with last week. Hopefully, cash will not trade lower, or futures
could see further pressure. Thursday is the last trading day for February live
cattle and it does not look as if it will close the chart gap, which it was so
close to accomplishing the past few days. Boxed beef is providing some support
as choice was up $1.29 with select up $2.54 on Wednesday. This indicates demand
is holding for now. Feeder cattle futures had a larger price correction with
contracts through May more than $3.00 lower. Feeder cattle and calves continue
to command higher prices at auctions as supplies are tight.
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