DTN Early Word Opening Livestock predicts recovery
Last Wednesday, the DTN Early Word Opening Livestock was released. It noted a likely comeback of indicated that firm pressure due to the weaker undertone seen through the livestock complex over the last two trading sessions. This will likely limit any short-term buyer support that tries to cover short positions in the market.
Rick Kment, DTN Analyst, predicted cattle as having a $1 Lower Live Equiv of $140.17 -0.74 and hogs having a $1 Lower Lean Equiv of $ 83.31 -1.89. These estimates were based on a formulas estimating live cattle and lean hog equivalents of gross packer revenue.
Early trade across the live cattle futures will most likely use a combination of follow-through selling pressure and light short-covering. This will probably pressure nearby contracts, although this would be limited by the upcoming cash cattle trade and potential stability in the rest of beef market fundamentals. Although cash cattle markets remained underdeveloped as of Wednesday, the sluggish packer interest was predicted to improve moderately. However, the development of the Fed Cattle Exchange Auction may not have significant market force given the limited activity over the last few weeks.