DTN Early Word Livestock Comments 12/27 06:13

DTN Early Word Livestock Comments 12/27 06:13 Traders Will Adjust to the Reports Cattle were able to close the holiday-shortened week higher and were higher for the week. Traders seemed to be confident of a friendly Cattle of Feed report and were willing to put money behind that anticipation. Hog traders were more cautious due to uncertainty of what the numbers may show on the quarterly Hogs & Pigs report. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $197.10 +0.99* Hogs: Steady Futures: Higher Lean Equiv: $ 98.21 +6.80** *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: Traders seemed to be confident of the Cattle on Feed report being somewhat bullish. The bottom line is that the report ended up being neutral for the most part. On Feed numbers were near where they were expected at 100%. Placements at 104% were somewhat bearish with the trade expecting 103.4% However, this was offset by Marketings at 105% of a year ago compared to the estimate of 104.4%. Traders may take their pick of which way they want to go with the market, but sellers may get the upper hand due to the large increase of futures on Thursday that now does not seem necessary. Futures may have been overdone to the upside. Feedlots will want a repeat of last week and will attempt to hold out for higher cash after being able to reverse lower cash earlier last week. They hope packers will need cattle and will buy at no less than steady cash. Some support will come from higher boxed beef prices with choice gaining $1.08 and select up $2.12.