DTN Early Word Livestock Comments 10/03 06:15
Traders Remain Uncertain of Cash
Cattle futures pushed higher early Monday as the market was relieved there
was no government shutdown. However, futures could not hold the gains as the
market settled back to focus on the fundamentals. Hogs were mixed with nearby
contracts lower; December took a beating.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $221.86 +$1.34*
Hogs: Higher Futures: Mixed Lean Equiv: $103.11 -$1.19**
*Based on formula estimating live cattle equivalent of gross packer revenue.
(The Live Cattle Equiv. 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.
Deferred cattle contracts posted greater gains than nearby contracts, but
all contracts could not hold the gains made earlier in the day. It seemed like
traders were exuberant the government did not shut down, leaving business as
usual; but that ran its course as futures settled back. Traders then focused on
fundamentals again. Boxed beef prices were higher Monday with choice up $2.30
and select up $0.94, making it a good beginning to the week. Traders will be
concerned over the potential for cash this week. Steady-to-lower prices last
week put the market in a defensive position. Packers are slowing slaughter,
which may have resulted in more cattle being purchased for deferred delivery
last week. Feeder cattle held onto more gains but were down from their highs.
Buyers are showing more hesitancy at auctions with feeders trading lower.
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