DTN Early Word Livestock Comments 08/09 06:13
Livestock Futures Show Strong Support
Live cattle were cautiously higher Monday. Feeder cattle capitalized on
lower corn futures providing some spillover support. Traders are uncertain
whether higher cash will materialize. Hogs were very strong with front-month
August continuing to push higher and October narrowing the gap.
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $195.85 +$0.84*
Hogs: Higher Futures: Mixed Lean Equiv: $132.14 -$0.97**
*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.
Traders were cautiously optimistic in live cattle posting moderate gains
partly on the ideas that packers will be more aggressive buying this week and
may pay more and partly because of spillover support from the strength in
feeder cattle. Feeder cattle reacted positively to lower corn prices as they
usually do. Packers have some cattle already purchased ahead but strong
slaughter pace may require them to be more aggressive as they were last week to
stay ahead of demand. Boxed beef gained Monday with choice up $1.62 and select
up $0.19. Boxed beef has had a tendency lately to see about one day of stronger
prices followed by weakness. The Commitment of Traders report showed funds as
net buyers of only 499 contracts bringing their net long position to 38,004.
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