DTN Early Word Livestock Comments 02/01 06:23

DTN Early Word Livestock Comments 02/01 06:23 Cattle Futures to Remain Supported Cattle futures were mixed into the close Wednesday as traders positioned ahead of the inventory report and over concern with the weakness of boxed beef. Hogs were mixed but mostly higher with traders uncertain over ongoing demand. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $217.35 -$1.28* Hogs: Higher Futures: Mixed Lean Equiv: $93.82 -$0.99** *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 seemed to position themselves ahead of the Cattle Inventory report with some slight liquidation and spread trading by selling nearby contracts and buying deferred contracts. This was not done earnestly but to protect against an unexpected report. The spreads might be unwound Thursday as the report overall was rather neutral. It showed cattle numbers are tight and should continue supporting cattle prices for a while. However, the numbers were much in line with estimates, which may not create any kind of kneejerk reaction and explosive price movements. A link to the analysis of the report is in Wednesday's closing livestock comments. There was some light cash traded Wednesday at $176 live in Kansas and $275 dressed in Nebraska, but not enough to set prices for the week. Packers may step up a bit more aggressively as they will need cattle and might be able to afford to hold out much longer. Boxed beef was lower with choice down $1.53 and select down $2.88.