DTN Early Word Livestock Comments 08/22 06:15

DTN Early Word Livestock Comments 08/22 06:15 Cattle Expected to Gap Lower Traders positioned themselves ahead of the Cattle on Feed report but may not have positioned themselves enough. Traders were wary that the report could show a surprise as has generally been the case, and it was. Hogs were under pressure as cash plummeted along with cutout weakness. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $194.47 Unchanged* Hogs: Lower Futures: Mixed Lean Equiv: $125.23 -$2.76** *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: Live cattle closed higher on Friday but could not hold the highs of the day. Traders positioned themselves ahead of the Cattle of Feed report trimming some of the gains. The last number of reports were miscalculated by the trade and this one was no exception. On feed numbers were close at 101% so no real surprise there. Placements were the bearish surprise at 102% compared to the previous year and were even above the highest trade estimate. On top of that, marketings were 96% of a year ago right on the low end of the trade estimates and almost 1.0% below the average estimate. Futures are expected to be under pressure today as traders react to the report. More cattle have moved to feedlots due to drought conditions in many areas which could be more bullish over time, but feeder cattle are in demand as buyers have been aggressive at auctions as they anticipate higher prices down the road. Boxed beef was mixed on Friday with choice down $0.11 with select up $0.47.