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DTN Early Word Livestock Comments 04/19 06:30

19 Apr 2021
DTN Early Word Livestock Comments 04/19 06:30 There Is Strong Hope for Stability Traders have had the weekend to mull over last week's event. It is likely that no solid conclusions have been drawn, but it is a new week and livestock markets are oversold. Traders may cautiously test the market on the buy side. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $204.23 -0.14* Hogs: Steady Futures: Mixed Lean Equiv: $118.60 -1.31** * 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 GENERAL COMMENTS: One has to believe the selling pressure should subside soon. Cattle futures have fallen seven consecutive trading days, pushing the market into an oversold condition. Even though cash cattle traded steady to $1.00 higher last week, rising feed prices and poor exports were the overriding factor. The trend has turned lower for the time being. Packers will use this to their advantage and likely only want to purchase cattle at steady prices this week despite very strong boxed beef prices last week. They will still need to purchase cattle for strong demand, but the market may have turned. Weakening futures generally result in feedlots being more willing to sell rather than wait and continue to feed market-ready cattle and avoid a potential drop of prices. There is one technical consolation, and that is that April and June futures established an inside trading day Friday. However, later contracts did not show the same as they made lower lows.