DTN Early Word Livestock Comments 06/26 11:32

DTN Early Word Livestock Comments 06/26 11:32 Pressure Expected on Cattle Futures Lower cash last week offset any gains that might have been seen from lower corn prices at the end of the week. Feeder cattle reacted accordingly with futures gapping higher and showing strong gains. Hogs closed mixed with lower cash and the market still correcting from being overbought. Robin Schmahl DTN Contributing Analyst Cattle: Lower Futures: Lower Live Equiv: $241.55 -$0.72* Hogs: Higher Futures: Mixed Lean Equiv: $104.45 +$0.86** *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: Live cattle traded mixed Friday as the second week of lower cash trade did not lend itself to a rebound of futures. This may leave traders cautious Monday as the uncertainty of cash and the volatility of corn may keep futures mixed. However, the bearish implication of the Cattle on Feed report might have the upper hand with traders selling more aggressively. May placements were quite a bit higher than the trade expected. Expectations were for placements at 101.7% of a year ago with the report showing them at 105.0%. That is bearish for the market and could result in futures gapping lower on the open. On-feed numbers were 97.0% compared to the estimate of 96.8%. Marketings in May were 102.0% compared to the estimate of 101.6%. Packers may bid lower this week using the report and boxed beef weakness as leverage. Boxed beef on Friday showed choice down $0.46 and select down $3.84. Feeder cattle reacted positively to the pressure on corn posting triple-digit gains, but there may be no follow-through in reaction to the Cattle on Feed report. The Commitment of Traders report showed funds trimming their long position by 8,999 contracts, bringing their net-long futures position to 111,401 contracts. Feeder cattle showed funds selling 3,003 contracts, bringing their net-long positions to 15,695.