DTN Early Word Livestock Comments 05/14 06:41

DTN Early Word Livestock Comments 05/14 06:41 Livestock Futures Could Bounce Feeder cattle did not quite feel the pressure of the rest of the complex due the weakness of grain futures, but Thursday was not a good day. It may be difficult to recover the losses in the near-term as traders have become increasing cautious. Futures could bounce as the reaction Thursday to the news subsides. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $231.01 +0.39* Hogs: Lower Futures: Mixed Lean Equiv: $122.78 +2.01** * based on formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. 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: It was an ugly day Thursday with futures falling in all categories of the livestock complex. Live cattle were hit hard, eliminating basically all of the gains of the week. Plummeting grain prices had no influence as the cattle market was trumped by the rumor of a major beef plant not running a Saturday slaughter schedule. This is a bit confusing due to strong boxed beef prices and slaughter weights declining. One would think packers would want to process cattle in order to meet demand and take advantage of the phenomenal price spread between cash and boxed beef. Maybe the substantial profits being made are allowing them to take some time off. Prior to that rumor surfacing, the dismal exports sales report of only 13,100 metric tons of sales, which were down 22% from last week and down 35% from the four-week average, set the stage for lower futures. The drop in futures will be difficult to regain as those traders who recently bought into the market got burnt and may remain sidelined.