DTN Early Word Livestock Comments 03/17 06:21
Hog Weakness Seems Excessive
Cattle found some support due to the selling of futures subsiding. Live
cattle futures now carry a discount to cash, which stopped the selling tide
Thursday. Hogs fell completely apart, suffering heavy losses on what seemed to
be technical selling magnified by stops being triggered.
DTN Contributing Analyst
Cattle: Lower Futures: Mixed Live Equiv: $210.74 -$0.35*
Hogs: Lower Futures: Higher Lean Equiv: $91.73 -$1.89**
*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.
Live cattle were able to find some support due to futures now holding a
discount to cash. Futures are not expected to rebound much Friday as traders
look ahead to the Cattle on Feed report this afternoon. Estimates are for
cattle on feed March 1 at 95.6%, placements during February at 93.9%, and
marketings at 95.8%. A bullish report has been anticipated, yet the market has
endured selling pressure recently. Futures will move relative to how the
numbers are compared to what the estimates are. The trade knows cattle numbers
are tighter and will remain that way for some time, but demand will be the
driver of price. Boxed beef has been struggling with choice down $0.32 and
select down $0.87 Thursday. Export sales were an improvement over the previous
week with net sales of 17,700 metric tons (mt), up from last week, but not as
good as hoped. Cash has traded $1.00 lower in both the North and South this
week with little change expected Friday as packers finish out purchasing their
needs. Feeder cattle at auctions were selling at lower prices this week in
response to lower cattle futures. Futures bounced even though corn was higher.
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