DTN Early Word Livestock Comments 05/23 06:25

DTN Early Word Livestock Comments 05/23 06:25 Uncertain Beginning to Week Cattle floundered, not only because of futures not being able to find support in general, but also due to the Cattle on Feed report that was to be released after the close on Friday. Feeder cattle continued to set new contract lows. Hog futures pushed higher with June leading the way due to strong cash and higher cutouts. Robin Schmahl DTN Contributing Analyst Cattle: Lower Futures: Higher Live Equiv: $194.39 -$0.30* Hogs: Higher Futures: Mixed Lean Equiv: $114.73 +$3.85** *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: The awaited Cattle on Feed report was released on Friday and was not quite what the trade anticipated. Both on feed at 102% and placements at 99% were higher than anticipated. This is the second consecutive month that the estimates for placements were significantly below the actual. This is not a supportive report in light of the inflationary period we are in as well as the concern about a recession. If slaughter pace slows somewhat, cattle may back up into the market. Carcass weights declined last week and still cash is struggling as packers had purchased sufficient head for the week as well as some for the next few weeks. Cash does not look promising this week with some initial calls for another $1.00 to $2.00 lower. However, if futures do what they often do after a report, they may move higher Monday. The market may have already factored in the report with the weakness last week resulting in some short-covering Monday. Boxed beef prices were mixed on Friday with choice up $0.47 and select down $1.04.