DTN Early Word Livestock Comments 04/21 06:19

DTN Early Word Livestock Comments 04/21 06:19 Traders Regain Confidence Livestock futures rallied Tuesday even in the face of continued rising grain prices. Cattle may be pulled ahead more aggressively, increasing beef supply to a strong demand market. This could stabilize cash prices for a period of time. Tightening hog supplies have been a concern of packers and will remain that way for a period of time. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Higher Live Equiv: $205.61 +1.31* Hogs: Steady Futures: Mixed Lean Equiv: $121.54 +0.95** * 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: Fund selling and long liquidation finally ran its course. Futures were overdone to the downside, and even if the market would have been bearish, it was high time for a bounce. But that is just it. The fundamentals of the market have not been overly bearish, yet selling pressure continued to trigger sell stops, causing the market to pancake lower. Continued strength of cash and boxed beef prices did not warrant such a sell-off, nevertheless it did. Traders had the confidence to step back in and buy the market due to it being oversold, and because the selling pressure had also subsided. Beef demand through the spring is expected to remain strong, and there is high interest for friends and family to get together with outdoor grilling likely being a favorite way of being together while exercising social distancing. It is possible demand could increase more than it already has. However, futures regaining what was lost may be difficult to achieve. Higher grain prices may bring more beef to the market for a period of time.