DTN Early Word Livestock Comments 12/27 06:22

DTN Early Word Livestock Comments 12/27 06:22 Hogs May See Further Weakness Cattle futures had a rough beginning as the initial reaction to the Cattle on Feed report put pressure on the market Tuesday. However, that quickly dissipated, moving futures to positive territory. Hogs opened lower and extended the losses as Tuesday progressed. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Higher Live Equiv: $211.85 +$0.20* Hogs: Lower Futures: Mixed Lean Equiv: $88.63 -$0.09** *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: Traders had the Cattle on Feed report already factored in, resulting in futures moving to positive prices and closing higher. Gains were moderate, with traders looking ahead to what the cash market will do. This is the first time futures did not fall apart after the report as they did the previous three Cattle on Feed reports. This may provide more confidence for traders to buy into the market for a price retracement. Deferred feeder cattle contracts posted strong gains in anticipation of tighter supplies and higher prices during the second half of the year. Boxed beef closed higher Tuesday with choice up $0.83 and select up $0.04. There has been no cash activity so far and cash trade may follow a similar pattern to last week with activity delayed until late in the week. Feedlots will hold for higher prices as they scored a victory last week and will look for the same, even though it is a holiday week.