DTN Early Word Livestock Comments 10/07 06:25

DTN Early Word Livestock Comments 10/07 06:25 Export Sales May Set Direction There was again a significant divergence between cattle and hogs. Cash cattle trading activity indicates steady to higher prices for the week. Hogs continue to struggle as cash continues to decline while cutouts remain volatile. Robin Schmahl DTN Contributing Analyst Cattle: Steady Futures: Higher Live Equiv: $213.51 -1.52* Hogs: Steady Futures: Higher Lean Equiv: $120.02 +4.73** * 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: Cattle futures struggled a bit in early trading Wednesday, but finally found greater buying interest from traders as cash cattle trading began taking place. Most trading activity showed steady prices Wednesday, but some trading took place $1 higher than last week's average prices in Kansas. This is certainly nothing to write home about, but it indicates cash will be no worse than last week. The problem of the weakness of boxed beef continues to remain. Choice cuts were down $1.09 with select cuts down $4.87 Wednesday. This dims the outlook for higher cash anytime soon. Cattle futures still remain in an oversold position, but not to the extent they had been. Weekly export sales will be released Thursday, which should provide some market direction.