DTN Early Word Livestock Comments 03/07 06:11

DTN Early Word Livestock Comments 03/07 06:11 Higher Cash Expected for Hogs The cattle complex showed quite a bit of strength to begin the week. Most months made new contract highs as prices march upward. April hogs took the brunt of spread trading, while later contracts were able to close mixed after a rough start. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Mixed Live Equiv: $215.00 +$0.35* Hogs: Higher Futures: Higher Lean Equiv: $94.56 +$1.76** *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: Feedlots are in control and will continue to command higher prices for cattle. There will be no surprise discovery of a large number of cattle that would impact the market negatively. Tightening supplies will be around for a while, giving confidence to feedlots to ask for higher prices. Packer margins are not quite as lucrative as last year or the three-year average, but they are not bad either. Traders did not wait around this week to get a better idea of potential cash and weekend demand but bought into the market more aggressively. Of the cattle purchased last week, 23% were purchased for deferred delivery. However, that will have little impact on the expectation of higher cash this week as packers have little bargaining power. Boxed beef was mixed Monday with choice up $0.88 and select down $0.39. Strong cattle prices are resulting in aggressive purchasing of feeder cattle as the outlook remains bullish.