DTN Early Word Livestock Comments 11/15 06:24

DTN Early Word Livestock Comments 11/15 06:24 Futures Could Face Headwinds Wednesday Cattle closed higher but quite a bit off the highs of Tuesday. Traders want to buy back into the market in anticipation of a retracement, but there is caution due to weakness of boxed beef. Hogs could not find solid support, opening lower and trading lower, keeping the market sideways. Robin Schmahl DTN Contributing Analyst Cattle: Lower Futures: Mixed Live Equiv: $215.26 -$1.33* Hogs: Higher Futures: Mixed Lean Equiv: $ 94.79 +$0.83** *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: There was buying interest in cattle futures Tuesday, but the higher prices could not hold, falling back substantially from the highs. Futures may not have much upside potential ahead of the Cattle on Feed report Friday. There is anticipation of another hefty placement number. The average estimate for on-feed as of Nov. 1 is 102.1% compared to a year ago. Placements in October estimate is at 107.0% and marketed in October estimate is at 98.1%. The large placement number may keep trading activity subdued the rest of the week with traders likely day trading ahead of the report rather than guessing the direction. The placement number is a wild card. Boxed beef prices did not provide support with choice down $2.18 and select down $1.36. Cash cattle trade has yet to develop. Feeder cattle futures had a price swing of $4 to $5 as traders reacted to the desire for a price retracement and the potential bearishness of the upcoming report.