DTN Early Word Opening Livestock 01/19 06:01
Meat Futures Set for Mixed Opening
On one hand, cattle futures seem ready to open moderately higher, supported
by residual buying interest and ideas of further cash progress close at hand.
On the other hand, lean hog issues are staged to begin some lower based on long
liquidation and defensive carcass value.
By John Harrington
DTN Livestock Analyst
Cattle: Steady-$2 HR Futures: 25-50 HR Live Equiv $132.43 + .83*
Hogs: Steady Futures: 25-50 LR Lean Equiv $ 84.10 -1.69**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Look for scattered bids to start surfacing in feedlot country Thursday. Yet
the big question may be how long it will take this to firm enough to generate
significant trade volume. Asking prices started the week bullish (i.e., $122 in
the South, $195 in the North), and we haven't seen anything in recent days to
suggest that country knees are weakening. Indeed, the combination of higher
cutouts and firming futures (together with a softer basis) seem more likely to
crack up expectations rather than water them down. If the country continues to
dig in their heels, significant cash business could be delayed until Friday.
Live and feeder futures should open moderately higher, supported by further
short-covering and ideas of another round of greater packer spending.
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