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DTN Early Word Livestock Comments 06/22 06:16
Cattle Futures Expected to Trade Higher
Cattle futures set back on Thursday as traders prepared for the Cattle on
Feed report and the extended weekend. Hogs closed mixed as traders had little
to influence their trading decisions.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Mixed Live Equiv: $288.19 -$0.34*
Hogs: Higher Futures: Higher Lean Equiv: $103.36 +$3.06**
*Based on the formula estimating live cattle equivalent of gross packer
revenue. (The Live Cattle Equiv. The 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:
Cattle traders thought it was best to take some profit off the table ahead
of the Cattle on Feed report and the extended weekend. There was really little
to be concerned over with the Cattle on Feed report, as most of the reports may
show a knee-jerk reaction if the report is negative, only to regain support in
time. Without the herd rebuilding, it is unlikely there is much downside to the
market. But anything can happen over a three-day weekend, and taking a profit
to reduce exposure was prudent. The news concerning the New World screwworm has
been taken in stride and has not impacted the market as had been feared. The
Cattle on Feed report was released and is neutral to slightly bullish. On feed
on June 1 was 102% and slightly below the average estimate of 102.3%.
Placements in May were at 90% and below the trade estimate of 92.8%. This would
be considered bullish. However, marketings totaled 88% and was below the
average estimate of 89.0%. This is considered slightly bearish and balanced the
report. Boxed beef was mixed on Friday, with choice up $0.45 and select down
$2.67. Live cattle sales on Friday ranged from $258 to $260.
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