DTN Early Word Livestock Comments 05/31 06:13
Follow-Though Buying Expected
Tuesday was a banner day for livestock with hogs leading the way. I can't
believe I could even say that due to hogs having been the worst performing area
of livestock for quite some time. Cash cattle did not trade but optimism is
strong for better cash.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $224.28 +$1.11*
Hogs: Steady Futures: Mixed Lean Equiv: $90.76 +1.48**
The cattle complex found some support from lower corn prices is the general
correlation. However, the greater support continues to be tighter supplies and
continued strong beef demand. Cattle futures soared to new contract highs.
Tuesday, boxed beef was higher with choice up $1.03 and select up $2.85. Higher
boxed beef and lower corn may have feedlots holding out for higher cash.
Packers have better margins than a year ago but will not want to pay more than
they need to. Last week, of the cattle they purchased, 30% were for deferred
delivery, which could make this week interesting. It is a holiday-shortened
week, so some cash could trade Wednesday. Feeder cattle pushed substantially
higher and not far from limit up Tuesday, but they did not hold the full gains.
This is an indication the market has not reached a peak and, even though
overbought technically, there is no indication of a top.
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