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DTN Early Word Livestock Comments      06/08 06:21
   A Crazy Market

   Cash cattle trade made another large jump Wednesday, but traders were having
none of it. Liquidation ran rampant across the cattle complex as sellers were
aggressive. Hogs showed weakness, partly from spillover pressure, but also in
reaction to lower cutouts Tuesday.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher         Futures: Higher    Live Equiv:   $237.18 +$2.36*

   Hogs: Steady         Futures: Mixed     Lean Equiv:    $92.24 +$0.17**

   *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.


   The pressure on cattle was totally surprising from a fundamental standpoint
but not from a technical standpoint. Fundamentally, packers stepped up very
aggressively again to purchase cattle, paying $3.00 to $5.00 higher for live
cattle in the North and as much as $10.00 higher for dressed cattle. Southern
trade remained very light as packers and feedlots are at a standoff. So why did
cattle futures plummet? That is difficult to determine when futures have
reached these lofty levels. Maybe bullish traders were watching the Superior
Livestock Auction Corn Belt Classic sale, leaving bearish traders with the
upper hand. Technically, the market needed to correct from its overbought
status, but with strong cash and boxed beef stronger again with choice up $3.79
and select up $2.12, there was no fundamental reason for the decline. If there
is follow-through Thursday, it would be surprising -- and also concerning.
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