DTN Early Word Livestock Comments 02/12 06:13

DTN Early Word Livestock Comments 02/12 06:13 Cattle Futures May Show Further Pressure Wednesday Cattle futures were unable to break out of the recent downtrend with selling pressure resuming on Tuesday. Hog futures pushed higher as traders felt confident of stronger pork prices and demand. Robin Schmahl DTN Contributing Analyst Cattle: Lower Futures: Mixed Live Equiv: $236.98 -$0.88* Hogs: Higher Futures: Mixed Lean Equiv: $105.37 +$0.10** *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 took it on the chin Tuesday and optimism is subdued. The market is making the anticipated correction despite tight supply fundamentals. The bottom line is demand. Has the market moved to a level at which demand has been impacted sufficiently to indicate prices are too high even with tighter supplies? We quickly become accustomed to high prices and expect them to remain that way. The reality is that even if the price declines by $20 or so, cattle prices are still very high. Further weakness in futures may increase the desire of feedlots to move cattle more aggressively even at lower prices. Holding them over may only result in yet lower prices. Boxed beef prices closed lower with choice down $1.04 and select down $1.71.