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DTN Early Word Livestock Comments 02/17 06:10
Traders May Be Aggressive Buyers of Cattle Futures
With higher cash cattle trading and coming off a three-day weekend, traders
are likely to be aggressive buyers of cattle futures. Hog futures may find
support after the weakness of last week, as liquidation might have run its
course.
Robin Schmahl
DTN Contributing Analyst
Cattle: Steady Futures: Higher Live Equiv: $270.01 +$1.16*
Hogs: Higher Futures: Higher Lean Equiv: $102.63 +$1.69**
*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:
Cash cattle traded as much as $4 higher late on Friday. With the markets
closed on Monday, traders were not able to react to the higher cash. This may
bring bullish traders into the market aggressively today. Even with packers
reducing slaughter, it is not backing up cattle and lowering prices. Feedlots
continue to hold for higher cash with record weights not having an impact. The
February live cattle price is below cash and likely will move in line with the
cash market. Boxed beef prices were mixed on Monday, with choice up $3.30 and
select down $2.19. The Commitment of Traders report showed fund traders
reducing their net-long live cattle long futures positions by 5,132 contracts
to 106,639. The long positions in feeder cattle futures were increased by 34
contracts to 17,959.
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