DTN Early Word Livestock Comments 08/24 06:16

DTN Early Word Livestock Comments 08/24 06:16 Cattle Futures May Pause Live cattle futures reflected the friendly Cattle on Feed report by breaking out to new contract highs Monday. Although no cash business was done, packers may be forced to pay higher this week to purchase needed cattle. Hog futures made a valiant attempt to move higher but could not hold the gains. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $254.58 +$1.65* Hogs: Steady Futures: Mixed Lean Equiv: $120.81 -$6.00** * 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: Both live and feeder cattle found strong support from the Cattle on Feed report with all contracts making new highs Monday. The exception was August feeder cattle as it will cease trading Thursday and is moving in close relationship with the index. There was no cash news Monday as usual, but when offers are posted by feedlots, they are expected to be higher and firm. The surge of futures and the prospect for tightening supplies will give feedlots the confidence to hold. Packers will be forced to bid higher to obtain needed cattle to keep plants running at desired levels. Boxed beef continued to increase with choice cuts up $2.97 and select cuts up $0.87. The July Cold Storage report showed beef inventory at 401.3 million pounds, slightly lower than June, but 9% below a year ago. The Commitment of Traders report showed funds as net buyers of 1,961 contracts, increasing their net-long positions to 70,773 contracts.