DTN Early Word Livestock Comments 09/06 06:22

DTN Early Word Livestock Comments 09/06 06:22 Cautious Start to Week Live cattle futures were able to break the downtrend Friday, showing impressive gains. This may have been tied more to short-covering rather than a change in trend. Hog futures did not follow a short-covering pattern into the extended weekend, but felt the pressure of lower cash and low packer margins. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Mixed Live Equiv: $192.44 +$1.09* Hogs: steady Futures: Mixed Lean Equiv: $110.01 +$0.14** *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: Cattle made impressive gains ahead of the weekend, which caused live cattle to break above the downtrend that has been in place for over the past two weeks. One needs to be careful to say that the market has turned the corner due to much of the activity likely being short-covering ahead of the weekend. Lower cash last week did not support the rally, but optimism reigned as packers were not very aggressive last week. The idea being they will need to step up to the plate again soon. Boxed beef closed higher with choice up $1.35 and select up $1.99. Feeder cattle showed gains even through corn was higher due to spillover support from live cattle. Feeder cattle prices at auctions last week showed weakness. Funds reduced their net-long positions by 5,651 contracts on the Commitment of Traders report. This brings their net-long positions to 57,997 futures.