DTN Early Word Livestock Comments 10/26 06:30

DTN Early Word Livestock Comments 10/26 06:30 Weekly Export Sales May Provide Direction Livestock futures closed positive across the board Wednesday. The selling pressure subsided in cattle as liquidation and a price correction ran its course. Lower cash has already traded this week and likely has set the stage for the week. Hogs were the recipients of trader interest in buying the break in an oversold market. Robin Schmahl DTN Contributing Analyst Cattle: Lower Futures: Mixed Live Equiv: $224.38 +$0.11* Hogs: Higher Futures: Higher Lean Equiv: $ 94.83 +$1.00** *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: Live cattle found some strength after the sharp decline experienced prior to and just after the Cattle on Feed report. The report has been digested with traders turning their attention to current fundamentals. Cash cattle so far this week have traded lower with the bulk of trading in the North for dressed cattle at $290. Trade has not surfaced in the South with bids and offers $4 to $5 apart. Cash trade will set direction as futures currently have lower cash already factored in. Boxed beef prices were mixed with choice up $1.52 and select down $2.34. The market will now need to prove itself before price will be able to regain what was lost and technical traders will set their sights on the chart gap that was left Monday. Feeder cattle showed greater strength Wednesday as the market rebounded from the lows. The big picture is it will take time to rebuild the herd as heifer retention has been limited at high prices. Buyers are holding back at auctions, waiting to see the strength of live cattle.