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DTN Early Word Livestock Comments 06/01 06:20
Increased Trading Limits for Cattle Take Effect
The livestock complex closed under pressure on Friday. Cash cattle traded
lower and cash hogs traded lower. Both cattle and hogs were lower for the week.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Lower Live Equiv: $289.12 -$0.92*
Hogs: Higher Futures: Higher Lean Equiv: $106.09 +$0.44*
*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 closed lower for the week as market sentiment seems to have
changed. Futures have struggled to sustain price strength on some days. Boxed
beef prices have shown more sustained weakness since the holiday. Boxed beef
prices were lower on Friday, with choice down $0.85 and select down $2.40. Cash
cattle traded lower, with Southern live cattle averaging $3.00 lower and
Northern dressed cattle $5.00 lower. Packers were not aggressive with cash nor
were they aggressive in volume last seek. Either demand is slowing noticeably
or packers are pulling back due to their margins being significantly in the
red. Some new cases of the New World screwworm (NWS) have been found about 55
miles from the U.S. border, which will continue to keep the border closed for
cattle imports. Increased daily trading limits will take effect today. The
daily limit for cattle will be $8.50 with an expanded limit of $12.75. Feeder
cattle will have a daily limit of $10.25 with expanded limits of $16.00. The
Commitment of Traders report showed fund traders reducing their long live
cattle position by 7,205 to a net long of 120,542. Funds were net sellers of
7,856 futures contracts in feeder cattle, reducing their net long to 10,963.
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