DTN Early Word Livestock Comments 06/28 06:28

DTN Early Word Livestock Comments 06/28 06:28 Cattle Should See Initial Support Packers will likely need to increase bids this week in order to increase their ownership of cattle. However, it they do not, futures may fall back again. Hogs have finished another brutal week, but the bounce on Friday may not yet indicate the market has found a bottom. However, being oversold increases the caution of traders holding short positions. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $221.68 -1.40* Hogs: Lower Futures: Mixed Lean Equiv: $119.22 -0.47** * 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: Live cattle futures were able to close slightly higher as traders were cautious ahead of the Cattle on Feed report. It had been a back and forth week beginning with a large price increase at the beginning due to the jump in cash. However, there rest of the week showed limited cash business being done through the close of futures trading Friday. Feedlots seemed to be waiting for the Cattle on Feed report to see if they have foundation to build on. Packers were waiting for the report to see how aggressive they need to be to procure needed supply. Packers appear to be well-supplied with cattle for the next few weeks, but they will need to continue to purchase ahead. The Cattle on Feed report was slightly friendly relative to trade estimates. The number of cattle on feed came in at 100% with the trade estimate at 100.6%. Placements were at 93% compared to trade estimates of 95.1%. Marketings were 123% compared to the estimates of 123.5%. It is difficult to assess just how this all compares due to the disruptions of the industry a year ago, but the main focus of the trade will be how the actuals fell in relationship to the estimates. Boxed beef was mixed, but the decline of choice cuts of $2.86 far outweighed the increase of select cuts of $0.04.