DTN Early Word Livestock Comments 04/16 06:19
Cattle May Struggle to Move Higher
Cattle had a strong Monday, posting triple-digit gains in all contracts.
Traders decided the market was a bit overdone on Friday. Hog futures wanted to
move higher but just could not hold the gains.
Robin Schmahl
DTN Contributing Analyst
Cattle: Lower Futures: Mixed Live Equiv: $222.02 -$0.76*
Hogs: Higher Futures: Higher Lean Equiv: $109.57 +$2.40**
*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.
GENERAL COMMENTS:
Traders thought cattle were overdone Friday with aggressive buying
propelling the market higher Monday. Fundamentals did not change over the
weekend, leaving the activity more technically driven. No cash cattle traded
and boxed beef did not perform exceptionally well. Boxed beef prices were mixed
with choice up $0.31 with select down $4.20. The large decline in select cuts
is not good and may limit upside price potential. Cash is projected to be lower
again this week. The Cattle on Feed report will be released Friday. The trade
estimates are for on-feed numbers April 1 at 102% of a year ago. Placements in
March are expected at 92.1% with marketings at 88.2% of a year ago.
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