DTN Early Word Livestock Comments 07/10 06:12
US/Mexico Border is Closed Again
Follow-through buying continued on Wednesday as traders felt confident of
further gains, given the trend has turn higher. The pressure on boxed beef had
no significant impact. Technical traders seemed to provide support to the
market. There was limited support from cash or cutouts.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Higher Live Equiv: $281.57 -$4.29*
Hogs: Higher Futures: Mixed Lean Equiv: $117.98 +$0.05**
*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 made substantial gains over the past three days despite no
cash cattle trading and the staged reopening of cattle imports from Mexico. It
turns out that the trade seemed to know that it would be short-lived. Secretary
Rollins took action on Wednesday and closed the border to imports of cattle
from Mexico due to the discovery of the New World screwworm 370 miles south of
the U.S. border. This is closer than the previous discovery that had closed the
border. This is expected to provide further strength to the cattle market today
as traders react to the news. However, we could see some liquidation as this
may already be factored in. Traders may sell a higher opening due to the large
decline in boxed beef on Wednesday. Choice boxed beef fell $6.59 with select
down $5.19.
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