DTN Early Word Livestock Comments 10/04 06:17
Follow-Through Buying May Continue
Livestock futures were able to find buying interest with contracts posting
some nice gains. This was not enough to turn the trend higher, but it may
indicate a bottom may have been reached for the time being. Markets needed to
correct from an oversold condition.
DTN Contributing Analyst
Cattle: Steady Futures: Higher Live Equiv $182.24 +$0.38*
Hogs: Higher Futures: Higher Lean Equiv: $107.70 +2.27**
* 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
Cattle had a fire lit under them with futures posting some nice gains.
Futures are trying to correct from an oversold position but have so far not
made much progress. A least there was some strength, which may bring more
buyers into the market. There was no cash activity Monday as usual, but there
is hope that packers may need to buy cattle more aggressively this week. It was
positive to see boxed beef closing higher in both categories. Choice gained
$2.19 while select increased $1.18. We must exercise caution as one day of
gains for boxed beef does not indicate a change in trend. Packers want to see
margins improve and they may not be very willing to pay higher money for cattle
because of a positive start to the week. The Commitment of Traders report
showed funds as net sellers of 11,148 contracts bringing their net-long
positions to 62,075 contracts. Feeder cattle futures bounced likely due to an
oversold market and the beginning of a new month and new quarter.
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