calculating feeder cattle futures contract

Cutouts were higher with a gain of $1.61. The National Direct Afternoon Hog report showed cash up $1.04 as packers remained aggressive so far this week. May hogs closed under pressure as we move closer to the end of the contract as the index struggles to move higher. Hogs closed mixed with spread trading evident. Lower corn prices had no impact on the selling pressure. This is the largest one-day decline in the currently traded futures contracts. Feeder cattle led the weakness with a decline of nearly $4.00 in all contracts. Boxed beef prices were lower with choice down $0.78 and select down $2.34. The technically overbought futures market added to the bearishness as long liquidation took place. Holding cattle may only mean lower prices as this time of year generally shows slower demand.

Even though cattle supplies are not abundant, feedlots want to move cattle before further price erosion takes place. Some cattle traded in the South $1.00 lower than last week with dressed cattle in the North $3.00 lower. Light trade was seen in cash cattle and what took place was not friendly to the market. ** based on formula estimating lean hog equivalent of gross packer revenue. Index has been updated to depict recent changes in live cattle weights and grading percentages.)

*Based on formula estimating live cattle equivalent of gross packer revenue. Hogs: Higher Futures: Higher Lean Equiv: $89.04 +$1.61** Cattle: Lower Futures: Lower Live Equiv: $226.91 -$0.92*

Calculating feeder cattle futures contract