DTN Early Word Livestock Comments

Cattle: Steady Futures: Mixed Live Equiv: $194.13 +$0.44*

Hogs: Lower Futures: Mixed Lean Equiv: $110.69 -$0.33**

*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 bigger news for the livestock complex, as well as the grain complex, was that the Foreign Agricultural Service retracted the weekly export sales information of Thursday. They had migrated to a new reporting system, which encountered some problems with reporting that made the numbers inaccurate. Thus, the weekly export report Thursday provided much confusion.

Live cattle futures closed mixed with nearby months showing minor losses, having little fresh news to trade. Cash was steady to $1.00 lower depending on the area. Boxed beef was mixed again as has been the pattern this week, with choice up $0.71 and select down $0.08. Feeder cattle gained strength as corn prices came under pressure.

Hogs were able to rebound from the lows, closing moderately higher across the board. There was little incentive for traders to buy into the market with cash down $7.88 on the National Direct Afternoon Hog report and cutouts slipping $0.33. Even though hogs spent some time in negative territory Thursday, the chart gap in October failed to be closed leaving a negative technical tone. Saturday estimated hog slaughter is 37,000 head.

	BULL SIDE		BEAR SIDE
1)	Slaughter pace remains brisk as plants continue to move product to satisfy consumer demand.	1)	The trend seems to have turned down with another lower low and lower high again Thursday.
2)	Lower cash has been established for the week, which should leave live cattle futures mixed to end the week.	2)	Strength in corn futures overnight may put pressure on feeder cattle again.
3)	Hog futures were able to close higher despite significantly lower cash and lower cutouts.	3)	October hogs came within 25 points of closing the remaining chart gap. This leaves the potential for price to fall back before finding any technical trade buying interest.
4)	Hog futures are oversold, which may trigger some short covering into the weekend.	4)	Both cash and cutouts have done poorly this week as demand slows ahead of Labor Day.

**

For our next livestock update, please visit our Midday Livestock comments between 11 a.m. and noon CST. Also, stay tuned to our Quick Takes throughout the day for periodic updates on the futures markets.

Robin Schmahl can be reached at rschmahl@agdairy.com

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