DTN Early Word Livestock Comments 06/12 06:20
Traders Wait for Cash Trade to Develop
Cattle futures took a breather on Wednesday. Traders are waiting to see at
what price level cash trade will develop. Demand remains strong. Hog futures
held gains and closed at new contract highs in most months Wednesday. Packers
remained aggressive on Wednesday.
Robin Schmahl
DTN Contributing Analyst
Cattle: Higher Futures: Higher Live Equiv: $272.72 +1.75*
Hogs: Lower Futures: Higher Lean Equiv: $118.90 +2.20**
*Based on the formula estimating live cattle equivalent of gross packer
revenue. (The Live Cattle Equiv. The 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.
GENERAL COMMENTS:
Cattle futures took a breather Wednesday as traders waited to see if cash
activity would mirror the limited trade that took place on Tuesday at $5.00
higher. Fundamentals remain supportive. Boxed beef price increased with choice
up $3.00 and select up $0.91. Consumers want beef and continue to purchase it
at these higher prices. Packers have slowed slaughter to improve their margins
and back up cattle in the country, but that has not been accomplished. Feedlots
hold for higher prices and have no concern over heavier cattle, as the increase
in cattle prices has more than offset feed costs. The WASDE report will be
released Thursday morning.
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