DTN Early Word Livestock Comments 06/12 06:28

DTN Early Word Livestock Comments 06/12 06:28 Traders May Begin Week With Caution Cattle futures closed lower for the week while hog futures closed higher. This certainly was a turn of events as it has been the other way around for quite some time. Strong cash cattle could not stem the pressure. Cash hogs were strong until Friday, which may be reflected Monday. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Higher Live Equiv: $241.90 +$2.41* Hogs: Steady Futures: Mixed Lean Equiv: $95.48 +$2.71** *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: Cash cattle showed a second week of substantial gains with Northern cattle trading $10.00 higher while Southern cattle were $7.00 to $8.00 higher. It is incredible that demand remains as strong as it is as retail prices continue to climb. The market is trying to find a level at which demand will slow to become more in line with tight supplies. This is great for the feedlots as profitability improves. It is doubtful cash will be as strong this week as it has been the past two weeks, but that will be up to demand and whether cattle have been purchased for deferred delivery. Boxed beef prices continue to climb with choice up $4.20 and select up $1.61 Friday. USDA raised the average steer price on the WASDE report Friday by $5.20 from their May estimate to an average this year of $171.70. They raised the projected price next year to $182.00, an increase of $8.00 from their previous estimate. Feeder cattle showed a greater loss last week than live cattle as the market corrected from being overbought. They may see pressure Monday due to strong gains of corn in overnight trade. The Commitment of Traders report showed funds increasing their net-long live-cattle futures positions by 7,477 to a net long of 112,803 futures. Feeder cattle showed an increase of 569 long positions, bringing their net-long futures positions to 17,031.