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DTN Early Word Livestock Comments 06/15 06:19
Cattle May Show Further Weakness
Cattle futures spent little time in positive territory on Friday with
traders more interested in positioning ahead of the weekend and the uncertainty
of cash. Hog futures found support after an initial drop to new lows. Then
found stability for the final two hours of trade.
Robin Schmahl
DTN Contributing Analyst
Cattle: Lower Futures: Lower Live Equiv: $287.17 -$0.74*
Hogs: Higher Futures: Higher Lean Equiv: $103.98 +$2.90**
*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 futures spent little time in positive territory as cash trade was
slow to develop, leaving traders questioning whether steady to higher cash
trade would surface, with nothing done by the market's close. Instead of cash
being steady to higher, the result was steady to $1.00 lower. Packers will not
be very anxious to post bids this week, but will see how the news develops. JBS
announced the closing of two small plants -- one in Pennsylvania and one in
Tennessee. It is uncertain how much impact this will have on the market, other
than psychological. The other is that more cases of the New World screwworm
have been confirmed. The number of cases has increased to 12. These cases span
over six Texas counties and one New Mexico county. It has been found in cattle,
goats, sheep and a dog. Clearly, this is not going away anytime soon. Boxed
beef prices were lower on Friday, with choice down $1.28 and select down $0.53.
The Commitment of Traders report showed fund traders reducing their net-long
live cattle futures position by 7,035 contracts to a net long of 109,072. They
added 93 contracts to feeder cattle to bring their net-long positions to 11,392.
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