DTN Early Word Livestock Comments 04/18 06:15

DTN Early Word Livestock Comments 04/18 06:15 Extended Gains Expected Cattle futures turned higher after two days of weakness with traders anticipating higher cash again this week. They are not waiting for it but desire to get ahead of it. Hog futures pushed higher for the second day, partially due to stronger cutouts Friday as well as further short-covering. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Mixed Live Equiv: $225.18 +$2.83* Hogs: Higher Futures: Mixed Lean Equiv: $84.64 -$0.64** *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 cattle complex could not help itself but move higher. The bullish momentum remains due to strong fundamentals. The market will not go up indefinitely, but it has not yet found a level at which demand is slowing. Exceptionally strong cash last week will carry the momentum over to this week as feedlots know packers will again need to aggressively purchase cattle. Boxed beef continues higher with choice up $3.36 and select up $5.45. Slaughter pace remains strong as packers need to satisfy current demand. It is interesting that packers were able to defer 25% of last week's cattle purchases for later delivery. That may temper some of the gains of cash but likely not result in lower cash. The current market is not in a position to see cash weakness when cattle supplies are tight. Cash weakness will only develop if demand slows and boxed beef prices fall back. Nearby feeder cattle futures were very strong Monday even though corn futures increased substantially. Strong demand continues for feeder cattle at auctions due to the continued bullish posture of the fed cattle market.