DTN Early Word Livestock Comments 12/26 06:21

DTN Early Word Livestock Comments 12/26 06:21 Livestock Futures May be Under Pressure Live cattle felt the pre-report effects of positioning, resulting in mixed trade. Feeder cattle fared better with triple-digit gains. The bearish implications of the Cattle on Feed report might put pressure on the market Tuesday. Hogs closed higher across the board in anticipation of the Hogs & Pigs report. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Lower Live Equiv: $211.65 +$0.86* Hogs: Lower Futures: Mixed Lean Equiv: $88.72 +$0.75** *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 focus of trade to begin Tuesday will be the Cattle on Feed report. The report was bearish in all categories with the largest estimate being the placement number. This resulted in the fourth consecutive month with higher-than-expected placements. Placements were 98.1% with the trade estimating 92.2%. The on-feed number was 102.7%, slightly higher than expected. Marketings were 92.6%, a bit lower than expected. Futures are expected to open lower but may be offset to some extent by the development of stronger cash at the end of last week. Live cattle in the South traded $1.00 higher with dressed cattle around $3.00 higher. The previous three Cattle on Feed reports put pressure on the market with futures trending lower since the September report. Whether this will be the case again is difficult to say. The market may have already factored this in and may be supported by higher cash. Boxed beef was mixed with choice up $1.80 and select down $0.12. The Commitment of Traders report showed funds reducing their long position by 5,196 contracts, reducing their net-long position to 17,037 contracts. Feeder cattle showed a reduction of 595 contracts, increasing their net-short position to 2,258 futures contracts.