DTN Early Word Livestock Comments 08/13 06:26

DTN Early Word Livestock Comments 08/13 06:26 Mixed Trading Activity Expected Tuesday It seems the price rally in livestock Friday was technical with the market back to reality Monday. Traders are uncertain about cash cattle trade this week and may remain that way. Hog futures showed strength in the nearby months Monday with August remaining close to the index. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $230.80 +$1.73* Hogs: Higher Futures: Higher Lean Equiv: $106.45 +$1.61** *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: Cattle futures settled back Monday after Friday's large gains. There is some optimism that cash cattle may trade steady this week now that boxed beef has shown some strength. However, traders will exercise caution until cash activity takes place. The packers are holding the line on slaughter, attempting to improve their margins. They have been able to purchase cattle for deferred delivery, which may allow them the ability to hold the line on spending. Boxed beef was higher Monday with choice up $3.12 and select up $1.58. This is what packers want to see and the reason they have been reducing slaughter. It may not mean cash cattle will trade higher as a result. The WASDE report showed plentiful grain supplies and feed prices substantially lower than a year ago.