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DTN Early Word Livestock Comments 07/20 06:13
Selling Pressure May Continue in Cattle Futures
Cattle futures could not catch a break on Friday, with new lows in live
cattle and support being penetrated in the October, December, and February
contracts. Hog futures continued the rally, with August and October posting
triple-digit gains on friendly fundamentals.
Robin Schmahl
DTN Contributing Analyst
Cattle: Lower Futures: Lower Live Equiv: $270.46 -$0.86*
Hogs: Higher Futures: Higher Lean Equiv: $110.96 +$2.08**
*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 continued to fall, with new lows made in live cattle. The
October, December and February contracts fell below support, adding to the
technical bearishness. Packers lowered their bids last week, and feedlots moved
cattle. Southern live cattle traded $10.00 to $11.00 lower, with Northern
dressed cattle $12.00 to $15.00 lower. Cash had declined nearly $25.00 over the
past month. Adding to the bearishness was the decline in boxed beef, with
choice down $1.57 and select down $0.40 on Friday. Over the past month, choice
cutouts have declined $31.20. The weakness of cash and boxed beef is likely to
put further pressure on cash cattle and cattle futures. The Commitment of
Traders report showed fund traders reducing their long cattle positions in live
cattle by 4,532 futures contracts to a net-long position of 114,908. They
reduced their net-long positions in feeder cattle futures by 1,041 contracts to
a net long of 14,566.
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