DTN Early Word Livestock Comments 12/17 06:16

DTN Early Word Livestock Comments 12/17 06:16 Livestock Futures May Find Stability The cattle complex showed red through most of Monday as traders took some premium out of the market. The exuberance of last week may have been overdone with the potential for higher cash trade this week still in question. Hog futures suffered losses through the October contract despite higher cash and cutouts Monday. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $229.47 +$1.69* Hogs: Higher Futures: Mixed Lean Equiv: $101.39 +$0.92** *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 did follow through to the upside Monday, initially making new highs, but prices hit resistance and liquidation took over. Traders decided to take some of the premium out of the market until cash trade is established this week. The Cattle on Feed report will be released Friday but it was too early for that to have been a factor in trading. Boxed beef prices were mixed on Monday morning's report, but closed higher for the day with choice up $0.98 and select up $5.71. This may provide some stability Tuesday. There had been the idea that packers were short-bought last week, but that does not seem to have been the case as 32% of the cattle traded last week were for deferred delivery. This puts a different perspective on the potential that the packers may need to purchase early and aggressively this week. However, cash should remain supportive. Feeder cattle futures may have established a double-top technically, which could keep the market under pressure near term.