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DTN Early Word Opening Livestock 01/23 05:56
Cattle Paper Set to Open Moderately Higher
Live and feeder futures should open moderately higher, supported by
follow-through buying and cash market optimism. On the other hand, lean hog
contracts seem likely to begin Tuesday with mixed prices thanks to a slow
combination residual selling and short-covering.
By John Harrington
DTN Livestock Analyst
Cattle: Steady-$2 HR Futures: 25-50 HR Live Equiv $138.46 - .08*
Hogs: Steady/Firm Futures: Mixed Lean Equiv $ 87.28 + .73**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle market watchers are probably set to bet on a typically slow Tuesday
with neither bids nor asking prices well defined. Monday's bullish reaction in
live cattle futures should further stoke the recent fire of bullish momentum,
encouraging feedlot managers to confidently price showlists another $2 to $3
higher on a live basis (e.g., $126 plus). Having said that, feedlot managers
may not be in a hurry to suggest asking prices, choosing instead to monitor the
board's bullish potential for several days. Our guess is that significant cash
business may not surface until Thursday or Friday.
The markets opened firmer as called with more short-covering that took meal and beans to new highs for the recent move upward. Meal led the charge on concerns still about the health of Argentine crops. Soyoil futures lagged the pace, while wheat/corn trade was a dominant morning theme..............