DTN Early Word Livestock Comments 08/05 06:23
Limited Volatility Expected
Cash cattle managed to trade higher Thursday but had limited impact on
futures. There seems to be guarded interest in anticipating higher cash with
traders mainly waiting until it develops. Hogs reacted to the strong cash on
Wednesday and good export sales.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $196.19 -$1.02*
Hogs: Lower Futures: Mixed Lean Equiv: $132.87 -$0.69**
*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.
It was supportive to see cash cattle trade higher Thursday. Slaughter pace
has been strong, and packers needed to turn a bit more aggressive to ensure
sufficient supply. Lighter weights require more animals to obtain the required
tonnage. It is possible packers were willing to bid higher to maintain a
certain amount of forward contracted cattle in order to minimize having to be
very aggressive over the next few weeks. Cash traded $1.00 higher in the South
with Northern cattle $2.00 to $3.00 higher. Boxed beef prices were weaker again
with choice down $1.66 and select down $0.95. Weekly export sales were nothing
to write home about with sales totaling 12,000 metric tons (mt), down 52% from
the previous week. China was not listed as one of the top five buyers. They had
been a consistent buyer for quite some time.