DTN Early Word Livestock Comments 05/25 06:23

DTN Early Word Livestock Comments 05/25 06:23 Inventory Report Provides Little Direction Live cattle futures were lower Monday but held well considering the Cattle on Feed report released Friday. With Memorial Day nearly upon us, there is concern beef demand may slow thereafter. Hogs were lower Monday with some spread trading, but strong cash and higher cutouts should provide support. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Higher Live Equiv: $238.23 +1.54* Hogs: Steady Futures: Mixed Lean Equiv: $128.90 +1.35** * 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: Live cattle futures struggled all day Monday under the influence of the Cattle on Feed report and some uncertainty whether strong demand will continue into June. What might change the seasonal is that there are greater outdoor gatherings taking place as people are making up for lost time of getting together. Boxed beef continued to increase significantly with choice up $2.66 and select up $1.08. Monday was the eleventh consecutive day of higher boxed beef and was higher 25 of the last 26 sessions, yet cash has not followed. There is concern it will not move much this week as well. Packers seem to be increasing slaughter rates in order to meet strong demand, but the fact that Memorial Day is just around the corner, and potentially slower demand thereafter, the market will need to prove itself. Unfortunately, packers will err on the side of caution and likely not get too aggressive. Total beef in cold storage during the month of April was 453.6 million pounds. This was 29.4 million pounds lower than March and 5% below a year ago and should be considered supportive. The Commitment of Traders report showed funds were net buyers of 3,360 futures contracts bringing their net-long positions to 58,281.