DTN Early Word Livestock Comments 03/01 06:22
Selling Pressure May Subside in Cattle Futures
Traders were disappointed as cash cattle traded steady with last week. The
April contract is now the front month and is carrying a premium to cash. Hog
futures again found support as June and later contracts reached new highs.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $224.16 +0.84*
Hogs: Lower Futures: Lower Lean Equiv: $98.03 -$0.12**
*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 futures have been struggling over the past two days as weakness
increased long liquidation due to the market being overbought. Traders had
hoped cash would trade higher again this week, but steady cash developed, and
the February live cattle contract went off the board leaving a premium in the
April contract. Steady cash should be considered a victory, but lower export
sales did not provide support. It may be that higher beef prices are affecting
international interest with weekly export sales down 3% from the previous week
at 12,200 metric tons (mt). However, domestic demand is holding with boxed beef
higher Thursday. Choice increased $1.17 with select gaining $1.24. Feeder
cattle futures were the recipients of technical selling again as futures
correct from being overbought. Feeder cattle and calves remain in strong demand
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