DTN Early Word Livestock Comments 12/09 06:29

DTN Early Word Livestock Comments 12/09 06:29 Fund Traders Hold a Record-Long Hog Futures Position Cattle futures closed mostly higher Friday but lacked the strength anticipated as cash cattle were higher. Futures retained a discount as traders remained cautious. Hog futures were higher Friday despite lower cash. Packers are expected to be more aggressive this week. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $224.15 +$2.00* Hogs: Higher Futures: Lower Lean Equiv: $97.02 +$2.43** *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: Even though cash cattle traded higher last week, live and feeder cattle futures closed lower for the week. Northern dressed cattle traded $2.00 higher with Southern live cattle trading steady to $2.00 higher. Traders did not get too excited over the higher cash but remained cautious over the upside price potential. Boxed beef prices were mixed with choice up $4.20 and down select down $0.37. Packers will try their best to improve margins and may continue to slow the slaughter pace to accomplish that task. Cattle imports from Mexico remain restricted, which may continue to provide support as long as that remains in place. It is uncertain how many cattle packers have purchased for deferred delivery but one major packer had already purchased some cattle for delivery during the last week of December. The fund traders added 5,528 long futures positions in live cattle over the week ended Dec. 3, increasing their net-long positions to 123,878 contracts. They added 2,054 futures positions bringing their net-long position in feeder cattle to 17,521.