DTN Early Word Livestock Comments 12/30 06:18

DTN Early Word Livestock Comments 12/30 06:18 Strong Cash Continues to Support The cattle complex received another shot in the arm as packers paid even higher money Wednesday than the day before. Feedlots have the upper hand and are holding. Hogs were able to extend gains Wednesday with December regaining the losses of Tuesday. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $199.23 +$0.68* Hogs: Steady Futures: Higher Lean Equiv: $91.13 -$2.60** *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: Cattle have shown some exceptional strength so far this week with the potential for more gains. Packers had to pay as much as $5.00 higher Wednesday in the North in order to purchase the cattle they need for the beginning of the year. Cattle have not traded in the South yet, but that is expected to surface Thursday. Feedlots have the upper hand, knowing packers need to procure cattle. The online auction for fed cattle Wednesday showed no sales as bids of $138.50 were passed over as reserve prices were mostly $140. Boxed beef was higher again with choice up $1.05 and select up $1.00. Beef demand is uncertain moving into the new year, but the fact that packers are paying higher prices to obtain cattle provides a good indication it could remain strong. Maybe more beef will be on the menu in California after Prop 12 comes into effect and pork supplies in the state might be short resulting in higher prices. Consumers in the state may need more beef to fill the void.