DTN Early Word Livestock Comments 02/06 06:29
Futures May See Two-Sided Trading Activity
The livestock complex closed higher, posting double-digit gains in all
contracts except February hogs. Cattle were supported by cash trade while hogs
showed technical follow-through.
DTN Contributing Analyst
Cattle: Higher Futures: Mixed Live Equiv: $197.54 -$0.61*
Hogs: Lower Futures: Lower Lean Equiv: $86.86 -$2.45**
*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.
Feedlots held strong and were not willing to let cattle go at lower prices
or even steady money. Late trading developed in the North at $2.00 higher while
no trade was reported in the South. Trade was believed to have taken place
later after there was no further price reporting for the day. This will be seen
Monday after information is gathered. It is anticipated that late Southern
trade might have been at least $2.00 higher if not more. With light cash trade
taking place last week, it puts packers in a precarious position. They will
need cattle this week and may need to pay more to get them, but they will not
want to due to the weakness of boxed beef. Boxed beef prices on Friday were
lower with choice down $0.36 and select down $2.05. The activity last week will
increase the resolve of feedlots to stand strong again this week. An ongoing
issue with a third-party service provider impacted some reporting firms'
ability to provide the Commitment of Traders report with timely and accurate
data. The report will be delayed until corrected.
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