DTN Early Word Livestock Comments 05/13 06:33
Strength in Futures to Continue
Most of the livestock complex was able to close higher Tuesday. The hope is
that the trend will continue. Export sales reports will have an influence on
some trading activity and price direction Wednesday. Lower grain futures may
provide some support.
DTN Contributing Analyst
Cattle: Higher Futures: Higher Live Equiv: $230.62 +1.53*
Hogs: Steady Futures: Mixed Lean Equiv: $120.70 +0.91**
* 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
Live cattle futures were mixed, but generally higher despite the significant
weakness of corn futures. The beneficiaries of the decline of corn were the
feeder cattle, which posted triple-digit gains. Further pressure on grains
overnight should again benefit the cattle complex. Some cash business took
place Wednesday in the South at $119 to $120 with dressed cattle in the North
at $191. Further business should unfold Thursday as packers will need to keep
purchasing ahead. Boxed beef continues to escalate seeing no price resistance
and continually widening the price gap between cash and boxed beef. USDA
forecast beef production to reach 27.970 billion pounds this year with
production next year slightly lower at 27.405 billion pounds. Exports are
estimated this year at 3.227 billion pounds and 3.225 billion pounds in 2022.
The estimate for steer price is forecast at $116.30 this year with an increase
to $122 next year.