DTN Early Word Livestock Comments 10/05 06:22

DTN Early Word Livestock Comments 10/05 06:22 Price Divergence May Continue The cattle complex found strength as the day progressed Monday. Hog futures turned the other way posting triple-digit losses. The general reason was that the markets corrected from an oversold condition in the case of cattle and an overbought position in the case of hogs. This may continue Tuesday. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Mixed Live Equiv: $214.54 -1.36* Hogs: Lower Futures: Mixed Lean Equiv: $119.56 -0.99** * 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: The strength in the castle complex did not stem from higher cash trading due to no activity other than the distribution of showlists. Cash trading was not expected and may also not take place Tuesday. The only positive fundamental aspect Monday was the slight increase of $0.32 for select cuts. Increases in boxed beef have been few and far between over the past weeks. Choice cuts continued lower declining $3.18. The general aspect of the market was the fact that futures were oversold and short-covering was triggered, moving prices higher, erasing the losses of last week. The rally may be limited without a change in fundamental support. The Commitment of Traders report showed funds as net sellers of 5,934 live cattle futures contracts reducing their net-long position to 28,770 contracts.