DTN Early Word Livestock Comments 02/01 06:18

DTN Early Word Livestock Comments 02/01 06:18 Strong Demand Supports Prices Higher cash cattle on Friday bodes well for this week. Somewhat light activity last week could result in cash business being done earlier than usual. Strong pork cutouts should keep packers bidding no worse than steady to begin the week. Hog numbers are there, but demand is strong and packers need to deliver. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $154.09 +$1.28* Hogs: Steady Futures: Higher Lean Equiv: $91.39 +1.95** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue GENERAL COMMENTS: Sellers got their wish of higher cash on Friday, but that did not come without a fight. Overall cash trade was light, but a good $3.00 higher. However, packers were not going to give in easily, turning to the cull cow market aggressively to make up some of the difference in fed cattle numbers. The pattern is not likely to repeat itself this week. Packers may need to come to the terms with higher cash earlier this week to obtain a desired number of cattle. Feedlots will be resolved to hold for nothing less than Friday's higher prices. Boxed beef prices continued to increase from strong demand. If packers slow chain speed due to their not wanting to purchase cattle at higher prices, it could further tighten supply, pushing boxed beef higher. This would give confidence for feedlots to continue to hold for higher cash. Feedlots see no reason for the need to dump cattle, even though weights are high for this time of year. The concern for feedlots is the continued escalating feed prices, which may increase the need to remain current with marketing.