Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
LIVE CATTLE
Trade volume Monday was light to moderate. On Thursday is the Cattle inventory report. This week feedlots are looking for cash to be stronger but with negative packer margins packers are going to fight the higher prices. Packers will be buying for the first week of February and can pull from their own cattle and contract cattle. Also, packers have cattle that were delayed due to the storm. Traders are expecting all cattle and calves down from 1.3% to 2.1% with average all cattle and calves down 1.8%.
LEAN HOGS
The CME Lean Hog Index is $19.10 under the CME Pork Index and has been narrowing over the past week. However, it still remains very profitable for packers and should encourage packers to fill the kill chain. But at the same time, packers will limit slaughter so they don’t have to move excess pork at a loss to the daily market and will keep filling contracted pork orders.
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