DTN Early Word Livestock Comments 03/07 06:09

DTN Early Word Livestock Comments 03/07 06:09 Further Livestock Pressure From Higher Grain Prices Livestock futures fell out of bed on Friday with hogs limit down in contracts through July. Higher grain prices were the primary factors responsible for the weakness. More pressure may be seen Monday as grain prices are again higher overnight. Robin Schmahl DTN Contributing Analyst Cattle: Lower. Futures: Mixed. Live Equiv: $192.05 +$0.12* Hogs: Steady. Futures: Lower. Lean Equiv: $111.49 -$2.37** *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: Like it or not, rising grain prices are putting pressure on livestock futures despite any other supportive fundamentals. Live cattle were under pressure due to lower cash last week as feedlots wanted to move market ready cattle and packers pulled back on bids. Escalating feed prices pushed feedlots to move cattle. Lower boxed beef prices cause packers to bid lower for cattle. Substantially higher cost of production and the anticipation of yet higher input costs should eventually result in higher cash prices as supply tightens. However, rising consumer prices may limit the gains if demand for beef slows. One needs to remember that cash cattle prices do not have to rise to keep pace with expenses. It will depend on demand. Cash may struggle again this week as feed prices continue to rise and boxed beef still has not found a bottom. However, there was some sense of stability on Friday with choice down $0.02 while select increased $0.62.