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DTN Early Word Livestock Comments 05/29 06:15
Livestock Traders Wait for Cash Direction
Cattle futures tried to hold gains and push higher on Thursday, but bullish
traders finally gave up and prices declined. Hog futures were able to close in
positive territory as a further correction of the oversold status took place.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $290.04 -$1.98*
Hogs: Lower Futures: Higher Lean Equiv: $105.65 +$0.76*
*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:
Traders were not able to find any specific fundamental reason to support
cattle futures. Cash has not traded sufficiently to provide solid direction for
the week. Early strength on Thursday waned as traders could not find support.
Fundamentally, cattle supplies are tight, but that is old news. If demand
slows, it will not make any difference that supplies are tight. The slaughter
pace is lower, but cattle weights are higher. This results in a steady beef
supply despite the lower pace. Boxed beef prices have decreased since early in
the week. On Thursday, choice boxed beef declined $2.40, with select down $3.71.
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