DTN Early Word Livestock Comments 03/15 06:27

DTN Early Word Livestock Comments 03/15 06:27 Cash Cattle Expected Higher The cattle complex came under substantial pressure Thursday, led by the weakness of feeder cattle. The April live cattle contract closed the chart gap and fell back as technical pressure mounted. Hog futures chopped around in a tight trading range with traders wanting to see more fundamental support. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $229.17 +$0.61* Hogs: Lower Futures: Higher Lean Equiv: $99.17 +$1.41** *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: The April live cattle contract closed the chart gap and then retreated quickly as profits were taken and technical selling erupted Thursday. What was interesting is that some light cattle trade took place at anywhere from $3 to $6 higher. So then why the selling of cattle futures? It seems like it was a reaction to the Producer Price Index (PPI) report released Thursday showing an increase of 0.6% monthly and 1.6% on a yearly basis due to higher food and fuel prices. We have seen some negative financial reports that did not impact the market overall. However, there generally are kneejerk reactions to these reports. It appears higher cash will be paid for cattle again this week, which should turn futures higher. Boxed beef was higher with choice up $0.96 and select up $0.65. Feeder cattle fell substantially, but the weakness should be short-lived.