DTN Early Word Opening Livestock 06/27 06:02
Meat Futures Should Open With a Firm Undertone
The cattle complex should open solidly higher, supported by short-covering
and spillover buying. Lean hog futures are similarly set to open with a firm
undertone, boosted by short-covering and bull spreading.
By John Harrington
DTN Livestock Analyst
Cattle: Steady-$2 HR Futures: 50-100 HR Live Equiv $156.88 - .22*
Hogs: Steady Futures: 50-100 HR Lean Equiv $106.88 +.20**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
After being beaten to a pulp over the last two weeks, cattle feeders are
desperate to find a corner they can defend. Monday's triple-digit rally in
futures may be a promising serving of hope in that regard. Needless to say, the
board will need to do more work before it can lend cash potential any legs.
Accordingly, bids and asking prices will probably remain poorly defined Tuesday
with both sides monitoring the board for greater credibility. Our guess is that
significant trade volume will not surface until Wednesday or Thursday. Live and
feeder futures should open higher, supported by follow-through buying and ideas
of cash stability.
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