DTN Early Word Livestock Comments 12/08 06:21
Mixed Trade Ahead of WASDE Report
Cattle just could not hang onto early strength Thursday. Once futures failed
to post any further gains, traders sold the market again, resulting in new
lows. Boxed beef showed further weakness. Hog futures opened lower and remained
lower throughout the day. Futures could retest the lows.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $209.93 -$0.58*
Hogs: Lower Futures: Lower Lean Equiv: $ 91.05 +$0.40**
*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.
Cattle futures made a valiant attempt at taking back some of the losses of
Wednesday but failed as Thursday progressed. Once futures could not push higher
during the morning, more aggressive selling surfaced, quickly pushing contracts
lower. The bearishness of the market will be difficult to overcome. An
interesting comparison can be made by overlaying charts of different
commodities. An overlay of crude oil and cattle show nearly identical movement.
Crude oil is a better reflection of the economy, which does have an impact on
beef demand. If this correlation holds, stronger crude oil prices may result in
stronger cattle prices. Export sales of 200 metric tons (mt) for this year were
down 98% from the previous week. However, export sales of 18,400 mt for 2024
were up 7% from the previous week. Boxed beef showed weakness with choice down
$0.72 and select down $1.07. The WASDE report will be released Friday morning.