DTN Early Word Livestock Comments 10/01 06:42

DTN Early Word Livestock Comments 10/01 06:42 Some Profit-taking May Take Place The huge divergence between cattle and hog futures shows the dynamic between the two markets based on the results of last Friday's reports. The weakness of cattle pushed futures below technical support. Hogs have reached or exceeded technical resistance. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $218.15 -1.68* Hogs: Steady Futures: Higher Lean Equiv: $123.49 +1.18** * 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: Price weakness continued to mount most of the day Thursday in the cattle complex, resulting in triple-digit losses. Cash cattle traded steady, but the continued weakness of boxed beef and the implications of larger cattle numbers for marketing down the road, leaves support elusive. Steady cash cattle trade at $124 in the South and $196 on a dressed basis in the North should be viewed as positive. Any business that will be done Friday will follow the same pattern. Boxed beef price fell again with choice cuts down $2.35 and select cuts down $2.46. Technically, the market is oversold, but it can remain that way for an extended period of time if fundamentals and trader psychology remain bearish. However, it is Friday, and a price bounce is likely before the weekend.