DTN Early Word Livestock Comments 02/03 05:59

DTN Early Word Livestock Comments 02/03 05:59 Livestock Futures Strength May Be Difficult to Maintain The livestock complex pushed higher again Wednesday with the exception of February hog futures. They are moving closer to expiration and need to remain close to cash. Optimism reigns in the rest of the complex in anticipation of tighter supply and strong demand. Robin Schmahl DTN Contributing Analyst Cattle: Higher. Futures: Mixed. Live Equiv: $212.71 -$1.27* Hogs: Higher. Futures: Higher. Lean Equiv: $103.62 +$3.47** *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 continued to increase for the fourth consecutive trading day with contracts setting new highs as trader optimism runs high. The bullish cattle inventory report, weather impacting movement, packers bidding up for cattle and chain speed returning to where it should be is supporting futures. Just how far this will carry futures higher is unclear, but a strong move of this magnitude may be met with a price correction. Cash activity has been limited so far this week but what has taken place indicates feedlots should receive higher prices. Light trade in Nebraska took place as much as $4.00 higher. However, overall trade is not expected to be that strong. Increasing cattle futures have given feedlots the confidence needed to hold out longer this week in the hopes that packers will increase bids. There is concern over continued weakness of boxed beef with choice down $2.29 and select down $0.65. Inflation seems to be having an impact on beef demand.