DTN Early Word Livestock Comments 03/28 06:14
03/28/2023
DTN Early Word Livestock Comments 03/28 06:14
Follow-Through Strength Expected
The livestock complex came to life Monday, posting strong gains across the
board. It was as if the up-to-date Commitment of Traders report triggered
short-covering in an oversold market.
Robin Schmahl
DTN Contributing Analyst
Cattle: Higher Futures: Higher Live Equiv: $208.40 +$0.45*
Hogs: Higher Futures: Mixed Lean Equiv: $88.49 +$0.17**
*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.
GENERAL COMMENTS:
Live cattle moved higher right from the start of trading with the April
contract quickly closing the chart gap that had remained above the market. The
strong opening left a chart gap in the June and August contracts below the
market. The finally updated Commitment of Traders report and the market being
oversold might have been the catalyst to trigger buying. Boxed beef was higher
with choice up $0.48 and select up $0.97. The market is poised for further
follow-through strength as traders look ahead to the potential for possibly
stronger cash. Last week, packers were able to purchase 25% of cattle ahead for
deferred delivery even though business seemed to be light. March and April
feeder cattle futures have a chart gap under the market left after the strong
opening Monday. The March contract closed the upper gap, but now have a lower
gap with three days remaining of the contract.