DTN Early Word Livestock Comments 03/25 06:17

DTN Early Word Livestock Comments 03/25 06:17 Cattle Expected to Open Lower Monday Cattle took a beating Friday ahead of the Cattle on Feed report. Feeders led the weakness with large losses. Hog futures spent some time in negative territory, but buying interest emerged, resulting in a higher close in most contracts. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Lower Live Equiv: $229.12 -$1.95* Hogs: Steady Futures: Higher Lean Equiv: $100.32 +$2.32** *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: It was anticipated there would be some positioning ahead of the Cattle on Feed report as traders that had profits would want to preserve those profits. Feeder cattle were under the most pressure with May falling $4.30. There was concern, fearing another bearish surprise on the report, and traders were not disappointed. On-feed numbers came very close to the trade estimate of 100.8% with the actual number at 101.0%. The placements in February were bearish with the actual 110.0% compared to the average estimate of 106.3%. Marketings were slightly less at 103.0% with the estimate at 103.9%. The market will likely react negatively to the numbers, but some of it has been factored in. The initial negative reaction may be short-lived. Cutouts took a hit Friday with choice down $3.01 and select down $2.26. The Commitment of Traders report showed fund traders as net sellers of 617 futures contracts, bringing their net-long position to 66,730 long contracts for live cattle. Funds were net buyers of 1,287 futures contracts in feeder cattle bringing their net-long position to 10,622 contracts.