DTN Early Word Livestock Comments 04/20 06:28

DTN Early Word Livestock Comments 04/20 06:28 Cattle Are Ripe for a Bounce Cattle futures have been unable to find a bottom even though futures are now running at a discount to cash. Pressure stems from increasing grain prices and fund liquidation. The market is oversold and may be overdone to the downside, allowing for a price bounce. Hogs show their resiliency even after some bearish news last week, indicating there may be more strength remaining is this market. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $204.30 +0.07* Hogs: Steady Futures: Higher Lean Equiv: $120.59 +1.99** * 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: The bandage was not large enough to stop the bleeding Monday. Live cattle futures slowed their descent, but pressure from feeder cattle still pushed them into negative territory for the eighth day. Futures washed out early but rebounded substantially from the lows. This might signal that futures have fallen low enough to catch the interest of traders to buy back into the market. After all, cash has remained strong with no indication of what this week may bring. Boxed beef prices have also remained strong. It seems cattle futures have more than compensated for higher grain prices. April futures are trading at a discount to cash with only 1 1/2 weeks remaining to trade. The Commitment of Traders report showed funds as net sellers of 4,653 contracts, trimming their net-long positions to 87,231 contracts.