DTN Early Word Livestock Comments

Cattle: Steady Futures: Mixed Live Equiv: $191.52 -$0.12*

Hogs: Higher Futures: Mixed Lean Equiv: $103.62 -$0.86**

*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 were searching for some news to provide solid direction. However, with no cash movement there was nothing much to get traders excited. The consensus is that cash may trade steady with last week. Packers do not need to be as aggressive due to the Thanksgiving holiday next week. However, if the price is right and there are sufficient cattle available, packers may purchase as much as they can for deferred delivery. Boxed beef prices were mixed with choice up $0.38 and select down $1.45. Feeder cattle came under pressure as corn futures moved higher on the news of a Russian rocket landing in Poland, which is a member of NATO. That seems to have been digested in overnight trade, showing corn under pressure. Traders will also begin looking ahead to the Cattle on Feed report Friday.

Hogs pushed higher Tuesday with June, July, and August contracts making new highs. The hopes of strong demand through the holidays and an ongoing positive relationship with China provided continued support. Higher cash was expected Tuesday and that took place with the National Direct Afternoon report up $1.46. Higher cash is again expected Wednesday as packers are thought to need more hogs and will remain aggressive. However, the fact that the cash increase was not very great leaves it a little suspect that they will be very aggressive. Hogs seem to be readily available. Cutouts did not support the gains Tuesday with price down $0.86.

	BULL SIDE		BEAR SIDE
1)	Live cattle should remain supported even if cash remains steady this week. Slaughter pace continues to remain strong.	1)	Feeder cattle futures broke technical support Tuesday. If the market cannot recover Wednesday, increased liquidation may unfold.
2)	A retracement of corn prices should provide buying interest in feeder cattle.	2)	There may be limited upside for livestock futures the rest of the week due to the Cattle on Feed report to be released on Friday.
3)	New contract highs in June, July, and August hogs bode well for the complex. Supply is anticipated to tighten and demand hold.	3)	Pork cutouts continue to remain unable to find solid support. Prices are lowered to stimulate demand.
4)	The market continues to see lower hog weights at a time of year when weights generally increase.	4)	Packers are having no difficulty purchasing sufficient hogs to fill increased slaughter. They have not had to be very aggressive over the past few weeks.

**

For our next livestock update, please visit our Midday Livestock comments between 11 a.m. and noon CST. Also, stay tuned to our Quick Takes throughout the day for periodic updates on the futures markets.

Robin Schmahl can be reached at rschmahl@agdairy.com

(c) Copyright 2022 DTN, LLC. All rights reserved.