DTN Early Word Opening Livestock 02/22 06:10
Look for Cattle Paper to Open Moderately Higher at Midweek
Live and feeder issues should open with a firm undertone, supported by
follow-through buying and positive cash expectations. On the other hand, hog
contracts seem likely to begin with mixed price action with a combination of
residual selling and midweek short-covering.
By John Harrington
DTN Livestock Analyst
Cattle: Steady-$2 HR Futures: 25-50 HR Live Equiv $132.21 + .20*
Hogs: Steady/firm Futures: Mixed Lean Equiv $ 89.92 - .92**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
As long as cattle futures seem geared to move toward cash premiums, it's a
good bet that feedlot managers will dig in their heels with higher asking
prices. Some showlists have been priced as high as $123 to $124 in the South
and $193 to $195 in the North. Some preliminary bids should start to surface
Wednesday, but they may not be much better than $116/$186. Such a wide spread
between bids and asking prices could delay the development of significant trade
volume until Thursday or Friday. Live and feeder futures should open moderately
higher, girded by follow-through buying and country optimism.
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