DTN Early Word Livestock Comments 05/19 06:35

DTN Early Word Livestock Comments 05/19 06:35 Further Upside Expected for Livestock Futures Both live cattle and hog futures showed a much-awaited bounce. Confidence came from steady-to-higher cash for cattle and higher cash for hogs. The ban of cattle exports by Argentina will need to result in increased demand for U.S. beef or it will be a market disappointment. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Higher Live Equiv: $235.06 +2.30* Hogs: Higher Futures: Higher Lean Equiv: $122.76 -0.51** * 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: Live cattle were able to find support Tuesday from steady-to-slightly higher cash in the South while the North, prices were steady with last week. This can be considered a victory as there was some concern packers had enough purchased ahead, which would make them less aggressive. What really helped was the announcement by Argentina that they are banning all beef exports for 30 days in order to aid in the reduction of rising inflation. It is unclear how much that will help curb inflation for the country, but it certainly may help with export demand for the U.S. Boxed beef prices have been rising dramatically as domestic demand has been very strong. This action may increase export sales substantially, which should translate into high cash in the country, at least for a while. Demand is expected to slow seasonally after Memorial Day, but this may not be the case this year in the current market environment.