DTN Early Word Livestock Comments 12/28 06:05

DTN Early Word Livestock Comments 12/28 06:05 Hog Spreads May Unwind Live cattle struggled Tuesday, closing mixed due to the Cattle on Feed numbers as well as traders waiting for cash. Feeder cattle retreated, impacted by higher corn prices. February hogs exploded higher as spread trading dominated the day with February being the preferred month to buy. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Mixed Live Equiv: $204.57 +$4.03* Hogs: Higher Futures: Mixed Lean Equiv: $98.97 -$1.14* *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 futures just could not find either aggressive buying or selling Tuesday leaving the market neutral. Even though boxed beef prices were higher, traders seem focused on waiting for cash again. Even though there is a strong chance for higher cash, traders remained cautious due to the holiday week. Boxed beef showed an incredible gain in choice cuts of $8.09 while select increased $0.17. Feedlots will hold out again as they anticipate packers will need to be aggressive as they do not have many contracted ahead for this week. Feeder cattle were under pressure due to the somewhat bearish placement number of the Cattle on Feed report and due to higher corn prices. Futures may have a difficult time maintaining upward momentum this week. The Commitment of Traders report showed funds increasing their long positions by 213 contracts, bringing their net-long positions to 67,127 futures contracts.