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DTN Early Word Livestock Comments 04/29 06:41
Higher Cattle Futures Expected
Cattle futures continue to reach new contract highs. The large increase in
boxed beef should provide further support, as demand is not wavering. Hogs
struggled to maintain Friday's gains on Monday, but accomplished the task.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Higher Live Equiv: $249.96 +4.16*
Hogs: Higher Futures: Mixed Lean Equiv: $103.17 -$0.42**
*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 have no technical price resistance as new all-time highs are
being established. The price resistance is left up to the consumer or an
unexpected event that would impact the market. Imports of cattle from Mexico
might again be in jeopardy as Agriculture Secretary Rollins took a hard line on
the New World Screwworm. Boxed beef prices were incredibly strong Monday, with
choice up $6.22 and select up $5.01. Packers did not purchase many cattle ahead
last week for deferred delivery. This puts them at a disadvantage this week.
The recourse is to slow slaughter, but that has not been able to reduce cattle
prices. The result has been a tighter retail beef supply and higher prices. The
April contract will cease trading on Wednesday, with June taking over as the
lead month.
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