DTN Early Word Livestock Comments 08/09 06:31

DTN Early Word Livestock Comments 08/09 06:31 Cash Cattle May Trade Early Livestock futures were in peril early in the session Friday, but futures rejected the selling pressure roaring back to close higher for the day. This did not change the charts for cattle, leaving them rangebound. Hogs will need to gain support from cash and cutouts to extend gains. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $219.80 +$2.99* Hogs: Steady Futures: Higher Lean Equiv: $131.02 +$1.09** * 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: There was quite a bit of volatility in cattle futures last week, but the end result only showed moderate gains of less than a dollar in live cattle and about $1.50 for feeders. Cash cattle were higher with live cattle $2.00 higher while dressed cattle were $1.00 higher. It was positive to see a gain in cash, but it paled in comparison to a daily rise in boxed beef prices anywhere from $2.00 to $4.00 on a daily basis. Just on Friday, choice cuts rose $3.68 while select cuts jumped $3.32. The huge disconnect between cash and cutouts was evident again the past few weeks. Packers want to avoid spending too much on cattle in the anticipation boxed beef prices will decline seasonally after Labor Day. However, with lighter cash activity last week, packers may be forced to step up and purchase cattle earlier this week. Indications are that they will need to increase bids again to accomplish the task.