DTN Early Word Livestock Comments 04/22 06:06

DTN Early Word Livestock Comments 04/22 06:06 Cattle Expected To Open Higher Live cattle closed with minor gains on Friday ahead of the Cattle on Feed report while feeder cattle ended the day with losses. Traders positioned themselves to reduce risk for what the numbers might indicate. Hogs found strong buying interest even though packers had finished buying for the week. Robin Schmahl DTN Contributing Analyst Cattle: Lower Futures: Mixed Live Equiv: $219.24 +$0.22* Hogs: Higher Futures: Mixed Lean Equiv: $106.05 +$0.12** *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 numbers on the Cattle on Feed report were surprising to the trade making it an interesting beginning of the week. The number of cattle on feed was one percent below the average trade estimate at 101%. Placements were 4.8% below the average trade estimate of 88%. Both the on-feed and placement numbers were below the bottom of the range of trade estimates and would make it bullish for futures. However, marketings came in at 86% which was 3% below the average trade estimate and below the range of estimates making it bearish. Taking it as a whole, the report seems to be neutral to slightly bullish. The knee-jerk reaction to the report should be a higher opening today. Support may be seen from the fact that Southern cash cattle traded at steady money last week while Northern cattle traded $1.00 lower. This was much better than had been anticipated earlier in the week. Boxed beef prices were mixed with choice down $0.13 and select up $1.56. The Commitment of Traders report showed funds selling 5,104 live cattle futures contracts reducing their net long positions to 37,032 futures contracts. Fund sold 1,838 feeder cattle contracts reducing their net long positions to 4,181 futures contracts.