DTN Early Word Livestock Comments 02/07 06:27

DTN Early Word Livestock Comments 02/07 06:27 Lower Cash Cattle Trade Expected Friday Cattle futures plummeted Thursday as a top is in for now. Traders are liquidating and the record-long futures position is exaggerating the weakness. Lower cash trade adds to the pressure. Hogs showed their resilience with early selling being viewed as a buying opportunity. Pork cutouts were supportive. Robin Schmahl DTN Contributing Analyst Cattle: Lower Futures: Mixed Live Equiv: $238.28 -$3.58* Hogs: Higher Futures: Higher Lean Equiv: $101.29 +$1.81** *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 topped with a vengeance Thursday. The overall fundamentals have not changed, but the weakness of cash and the record-long futures positions by the funds have exaggerated the move. The April live cattle contract closed at the lowest level since Jan. 8. Cash cattle trade has been light, but lower, adding to the pressure. Cash trade will increase Friday as business needs to be done for the week. Feedlots may turn into more aggressive sellers as they realize that holding for higher cash means holding cattle over for another week and risking lower prices. Boxed beef prices were mixed Thursday with choice down $1.36 and select up $0.44. Weekly export sales were good at 24,900 metric tons (mt) indicating high beef prices did not turn away international buyers. Futures may stabilize ahead of the weekend as lower cash has been more than factored in. Feeder cattle futures have had a greater price decline than live cattle with the March contract falling nearly $13.00 from the high last week.