DTN Early Word Opening Livestock 03/27 06:09

DTN Early Word Opening Livestock 03/27 06:09
Meat Futures Staged For Long Liquidation Tied to Lifting of Brazilian Bans

The cattle complex should open significantly lower with early selling linked
to China’s decision to lifts its general ban on Brazilian meat. Lean hog issues
are also likely to begin on the defensive thanks to follow-through selling and
long liquidation.

By John Harrington
DTN Livestock Analyst

Cattle: Steady Futures: 100-200 LR Live Equiv $150.06 – .30*
Hogs: Steady-$1 LR Futures: 50-100 LR Lean Equiv $ 83.86 + .96**

* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue


In shocking reversals of trade policy, China and several other major meat
importers suddenly announced on Saturday the lifting of bans on Brazilian meat.
Just early last week, as many as 20 countries moved to ban Brazilian meat after
police reported cases of inspection bribery and possible meat contamination.
This story seemed to spark considerable CME buying interest in cattle futures,
tied to ideas that a major disruption in the global meat trade was afoot. With
China’s renewed acceptance of Brazilian product, such a theoretical disruption
would seem to be in doubt.