DTN Early Word Livestock Comments 11/11 06:27
Traders Increase Record-Long Hog Futures Position
Cattle futures were lower Friday as lower cash came to fruition and boxed
beef continued to weaken. Hog futures continued to show spread trading with
pressure on the nearby months. Futures continue to hold well with the market
correcting the overbought status.
Robin Schmahl
DTN Contributing Analyst
Cattle: Lower Futures: Lower Live Equiv: $222.12 -$0.87*
Hogs: Steady Futures: Higher Lean Equiv: $108.29 +$4.42**
*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:
The market anticipated cash would be lower and that took place Friday. Both
Northern dressed cattle and Southern live cattle traded $3.00 lower as feedlots
needed to let their cattle go and not hold out for another week. The weakness
of boxed beef indicates slower demand. That may not bode well for this week
either. The packers continue to work the slaughter pace to their advantage and
will continue to do so as they need to improve margins with boxed beef prices
continuing to decline. On Friday, boxed beef was lower in both categories with
choice down $1.53 and select down $0.53. The WASDE report released Friday was
positive as USDA raised their estimated cattle prices for the next four
quarters. Bear in mind these are estimates and market fundamentals may dictate
otherwise as time progresses. The Commitments of Traders report showed the fund
traders added 937 contacts of live cattle, bringing their net-long futures
position to 101,453 contracts. They added 2,379 futures contracts of feeder
cattle, bringing the net-long position to 10,130 contracts.
For more free DTN information sent right to your email each morning - click here to sign up for DTN Snapshot.
|