DTN Early Word Livestock Comments 08/05 06:17

DTN Early Word Livestock Comments 08/05 06:17 Export Sales May Set Direction Cattle and hogs diverged Wednesday. Live cattle futures found support from higher cash and continued higher boxed beef prices. Feeder cattle found some support from a lower corn price. Hogs fell apart later in the day as cutouts posted substantial losses. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Higher Live Equiv: $214.70 +2.58* Hogs: Steady Futures: Mixed Lean Equiv: $129.80 -4.68** * 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 futures extended their gains Wednesday with prices knocking on the door of making new contract highs. Steady weights and the potential for tighter supplies later in the year is supporting the market. The rise of boxed beef indicates strong demand. Choice cuts jumped $3.50 with select cuts increasing $3.66. Packers had to bid up to obtain cattle with cash generally trading $1.00 higher throughout the country. Feedlots are asking higher prices, but with trade developing Wednesday, it may be difficult to pry more out of packers unless they need to be more aggressive in obtaining supply Thursday or Friday. If futures move to new highs, traders may increase their buying as the trend may be turning up.