DTN Early Word Opening Livestock 09/19 06:03
Lean Hog Futures Set for Bullish Opening
The lean hog pit should open significantly higher thanks to impressive
carcass value strength and aggressive short covering. Cattle futures are likely
to open moderately higher, supported by positioning prior to the development of
cash business and the release of the monthly on feed report.
By John Harrington
Cattle: Steady-$1 LR Futures: 25-50 HR Live Equiv $167.94 - 0.86*
Hogs: Steady-$1 HR Futures: 100-200 HR Lean Equiv $122.60 + $4.11**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Some chores may be bittersweet, but they still have to be done. That may be
how packers consider the necessary early fall work of procurement. They find
themselves both short bought and painfully unsuccessful in selling beef higher.
Nevertheless, the cash trade will have to develop sometime today. Opening bids
should start around $155 in the South and $244-245 in the North, far below
asking prices of $164 in the South and $253-plus in the North. The September on
feed report will be released this afternoon at 2:00 CDT. Average trade guess
calls for August placement to be off 4%, August marketing to off 10%, and total
on feed as of Sept. 1 to be off 1-2%. Live and feeder futures should open
moderately higher, supported by short covering prior to late-week cash business
and the new feedlot inventory.
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