DTN Early Word Livestock Comments 06/08 06:21

DTN Early Word Livestock Comments 06/08 06:21 A Crazy Market Cash cattle trade made another large jump Wednesday, but traders were having none of it. Liquidation ran rampant across the cattle complex as sellers were aggressive. Hogs showed weakness, partly from spillover pressure, but also in reaction to lower cutouts Tuesday. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $237.18 +$2.36* Hogs: Steady Futures: Mixed Lean Equiv: $92.24 +$0.17** *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 pressure on cattle was totally surprising from a fundamental standpoint but not from a technical standpoint. Fundamentally, packers stepped up very aggressively again to purchase cattle, paying $3.00 to $5.00 higher for live cattle in the North and as much as $10.00 higher for dressed cattle. Southern trade remained very light as packers and feedlots are at a standoff. So why did cattle futures plummet? That is difficult to determine when futures have reached these lofty levels. Maybe bullish traders were watching the Superior Livestock Auction Corn Belt Classic sale, leaving bearish traders with the upper hand. Technically, the market needed to correct from its overbought status, but with strong cash and boxed beef stronger again with choice up $3.79 and select up $2.12, there was no fundamental reason for the decline. If there is follow-through Thursday, it would be surprising -- and also concerning.