DTN Early Word Opening Livestock 05/04 06:11

DTN Early Word Opening Livestock 05/04 06:11 Cattle Paper Staged for Follow-Through Buying Look for live and feeder duties to close sharply higher, boosted by technical buying, short-covering, and ever-tall cash premiums. Lean hog contracts seem set to open moderately higher, supported by spillover buying and technically encouraging charts. By John Harrington DTN Livestock Analyst Cattle: Steady/Firm with Wed Futures: 50-150 HR Live Equiv $153.85 + 1.51* Hogs: Steady-$1 HR Futures: 25-50 HR Lean Equiv $ 81.63 + .42** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue GENERAL COMMENTS: We really thought it would take packers some long and hard thinking this week before they aggressively moved to secure short-term slaughter. Given Wednesday's wild spending party, they must have been much hungrier than we thought. Storm-stressed cattle may have worked to some degree in making market-ready steers and heifers even tighter than expected. Yet packers remained stuck on the tight supply treadmill, forcing them to pay $7 to $8 more for live cattle in the South and $12 to $13 more for dressed cattle in the North. While light trade volume remains possible either Thursday or Friday, the lion's share of the cash trade appears to be generally completed. The balance of showlists are probably priced around $148 in the South and $232 plus in the North. Live and feeder futures should open significantly lower, supported by residual buying interest and cash premiums.