DTN Early Word Livestock Comments 03/04 06:19
Traders Should Remain Optimistic
It certainly was a positive close last week for the livestock complex.
Cattle futures were higher, even though cash was steady to lower. Traders
wanted to buy the break. Hogs were supported by strong cutouts and continued
DTN Contributing Analyst
Cattle: Steady Futures: Higher Live Equiv: $225.03 +0.87*
Hogs: Lower Futures: Higher Lean Equiv: $100.27 +$4.24**
*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.
Buying interest came into the cattle complex Friday with the movement
eliminating the losses of the previous three days. The April live cattle
contract closed at the highest level since Nov. 2, 2023. It did not matter that
cash traded steady to $2 lower. The focus was on the continued strength of
boxed beef during the week. Boxed beef on Friday showed choice up $1.08 with
select up $1.56. Packers have been reducing slaughter to back up cattle in the
country and improve boxed beef prices. Boxed beef has been improving, but
cattle are likely not going to back up very much due to already tighter
supplies. Feeder cattle futures posted strong gains as traders saw the recent
decline as a buying opportunity. Demand for feeder cattle continues to remain
strong. The Commitments of Traders report showed funds adding 4,769 long live
cattle futures positions, bringing their net-long positions to 58,972. There
were 1,687 long positions added to feeder cattle, increasing their net-long
futures positions to 9,085 contracts.
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