Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
CATTLE COMPLEX
Live cattle futures on Monday had traders unwinding bull spreads with the wide differences between the months. With June futures discount to cash. Last Friday, June live cattle were $11.36 under the 5 day negotiated steer price average. With next Monday first notice day, cash and futures should narrow, currently, there is no reason for hedged June longs to liquidate.
There is a large difference between the CME Feeder Index and August feeder cattle. There is a lot of time between now and when August feeder cattle expire so expect speculators to take advantage of it during June and July, no spot months.
LEAN HOG COMPLEX
Just the opposite of cattle, June lean hogs have been trading premium to cash. On Monday traders narrowed the difference. Traders were also starting to move July lean hogs to August and October. Volume was moderately active.
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