DTN Early Word Livestock Comments 01/30 06:11

DTN Early Word Livestock Comments 01/30 06:11 Mixed Trading Ahead of Tuesday's Report Feedlots held last week, resulting in steady to $1.00 higher cash. This week will be another test of their resolve due to increasing feed prices. Hogs adjusted to lower cash Friday in the February contract as it needs to move closer to the index. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $198.95 -$0.68* Hogs: Lower Futures: Mixed Lean Equiv: $87.06 -$1.21** *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: It paid for feedlots to hold out last week with Northern cattle trading steady while Southern cattle traded $1.00 higher than the previous week. That victory will increase their resolve again this week. However, the beginning of the week shows higher grain prices. Traders will be looking ahead to the Cattle Inventory report to be released Tuesday. This may keep price movement subdued Monday and Tuesday. There is widespread belief the cow herd will be lower on the report. A polling of some analysts showed the expectation that the beef herd will be down 4.2%. If so, the beef herd on Jan. 1 would be down 1.265 million head from a year ago at 28.860 million head, which would be the lowest beef cow herd on record. The calf crop is expected to be down 2.8% or a decrease of one million head from a year ago. This would continue to support cattle prices. The level of that support will be up to demand. Boxed beef has been slipping over the past two weeks with both choice and select down $0.99 and $0.94, respectively, on Friday. The Commitment of Traders report showed funds as net sellers of 9,456 futures contracts, bringing their net-long futures position to 75,165 contracts.