DTN Early Word Livestock Comments 04/17 06:17

DTN Early Word Livestock Comments 04/17 06:17 Caution to Dominate Early Trading Live cattle closed lower for the second consecutive day Friday, leaving traders guessing why after the strong cash gains during the week. Spread trading was evident in feeder cattle. Hogs were able to close higher after a dismal week of trading as some profits on short positions were put into the bank. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $222.35 +$1.19* Hogs: Lower Futures: Mixed Lean Equiv: $85.28 +$0.45** *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. GENERAL COMMENTS: The fact that cattle futures have had an almost relentless rise over nearly the past month, putting them into an oversold technical condition, might have been the reason for the decrease of futures even though cash cattle were exceptionally strong last week. Cash is again expected to be higher, which should provide further support to futures. However, if there were any indication of a crack in the wall due to a slowing of consumer demand or slaughter pace, futures could fall substantially. The job of the market is to move price to a level at which demand will slow and it will reach that level at some point as the market always will. But we have not yet seen any indication of the point being reached. Boxed beef prices continued to move higher Friday with choice up $2.20 and select up $0.49. It was a very strong week with choice up $9.45 and select up $5.36. That will be reflected at the retail level. Cattle supplies are tightening, and weights are lower, indicating they are being pulled forward. This requires more cattle to meet current demand. The Commitment of Traders report showed funds added 6,201 long futures positions bringing their total net-long positions to 89,431. Funds added 981 long futures positions in feeder cattle, bringing their total net-long positions to 7,500 contracts.