DTN Early Word Livestock Comments 05/15 06:21

DTN Early Word Livestock Comments 05/15 06:21 Follow-Through Buying Expected Wednesday Livestock futures were positive across the board Tuesday as demand seemed to show signs of improving. Feeder cattle led the charge with gains of more than $4.00 effectively ending the downtrend. Hog futures closer higher, but could not hold the initial strong gains. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Higher Live Equiv: $223.28 +$4.06* Hogs: Higher Futures: Mixed Lean Equiv: $107.33 -$0.93** *Based on the formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. The 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: Live cattle futures tested the top end of the trading range Tuesday. The strength of boxed beef may result in some follow-through buying which could push the market higher. Boxed beef showed impressive gains on Tuesday with choice up $5.44 and select up $6.64. We seldom see that kind of strength in boxed beef. This pushed choice back above $300 again. This changed the cash cattle outlook this week as stronger demand may require packers to be more aggressive with their cattle purchases. Feedlots will gain more confidence to hold. Of course, one or two days of good boxed beef prices do not mean demand has changed course, but it does indicate potential demand may not be as bad as feared.