DTN Early Word Livestock Comments 01/17 06:04

DTN Early Word Livestock Comments 01/17 06:04 Product Prices Provide Direction The trade was surprised cash cattle traded lower on Friday due to the consensus that it would be no worse than steady. The friendly WASDE report might have had an influence on sales as well as the lower trend of boxed beef. Hogs had strong gains in cutouts but lacked any strength in cash keeping a lid on price potential. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $205.06 +$0.32* Hogs: Lower Futures: Mixed Lean Equiv: $88.40 -$1.05** *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: Packers won the standoff last week with cash cattle trading lower. This was a surprise to many, but it should not really have been. Boxed beef prices declined most of the week possibly indicating consumers have reached a threshold. Of course, one week does not indicate there has been a major change in trend, but it does increase the caution of traders. Feedlots decided to let their cattle go for $1.00 lower in the South and $2.00 lower in the North deciding not to hold them over for another week. The volume of cattle purchased will be interesting to see as some would have been purchased for deferred delivery. Boxed beef could not find the support it needed with choice down $0.87 and select down $0.12. Monday showed choice up $0.81 and select down $0.34. Packers will not be anxious to post bids early in the week. Traders will be thinking of the upcoming Cattle on Feed report on Friday. The Commitment of Traders report showed funds increasing their long futures positions by 6,934 contracts bringing their net long futures positions to 91,803.