DTN Early Word Livestock Comments 10/25 06:20

DTN Early Word Livestock Comments 10/25 06:20 Traders Will Position Ahead of the Cattle of Feed Report Friday Cattle futures received a shot in the arm as cash cattle traded higher on Thursday. Futures adjusted to the higher cash and may trade mixed Friday ahead of the Cattle on Feed report. Hog futures showed some unwinding of spreads Thursday with nearby contracts eliminating the gains of Wednesday. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Mixed Live Equiv: $232.28 -$0.51* Hogs: Lower Futures: Mixed Lean Equiv: $104.04 -$0.07** *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: The packers needed to purchase cattle and they did not wait until today to do it. Cash cattle jumped $2.00 for both Northern dressed and Southern live. The inability of the packers to hold the line on cash is a testimony of the leverage feedlots have maintained and the need for the packers to meet steady demand. Boxed beef prices were lower but that will not have much impact on the market after the strength that has been seen recently. Choice boxed beef was down $0.24 with select down $1.43. The larger influence Friday will be the Cattle on Feed report. Now that traders have adjusted to the higher cash, they will position themselves ahead of the report. The average estimate for cattle on feed as of Oct. 1 is 99.7% of a year ago with the range of estimates from 99.1% to $100.1%. Placements in September are estimated at 95.6% with a range of 94.2% to 99.0%. Marketings are estimated at 102.2% with a range of 98.1% to 103.4%.