DTN Early Word Livestock Comments 04/07 06:08
Hog Futures Should Show Follow-Through Strength
Cattle futures were able to hold onto gains. Live cattle again moved to new
contract highs. Hog futures experienced incredible support, with contracts
opening higher and never looking back, closing above technical resistance.
Boxed beef prices were higher with choice up $0.26 and select up $2.18.
Robin Schmahl
DTN Contributing Analyst
Cattle: Higher Futures: Mixed Live Equiv: $287.46 +1.22*
Hogs: Higher Futures: Higher Lean Equiv: $105.12 +$0.09**
*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:
Cattle futures extended gains except for the April and May feeder cattle
contracts. The June and August live cattle contracts closed at new contract
highs. The April contract gapped higher on the open, leaving the gap to be
filled by the end of the month. The JBS plant in Greeley will be operating
again today, with contract talks continuing. This did not hurt the market as it
will open processing in an already tight market. This is not to say that cash
cattle prices will continue to increase, but it is likely to support the
market. The demand picture is what comes more into focus as beef prices
increase. Will consumers continue to purchase beef as food prices in general
continue to increase? A slowing of beef demand moving toward summer could have
a significant impact on beef prices. However, the supply of cattle will remain
tight.
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