DTN Early Word Opening Livestock 05/03 11:23

DTN Early Word Opening Livestock 05/03 11:23 Falling Cash May Be Difficult to Overcome Live cattle futures continue to exhibit weakness as nine consecutive days of losses keep long liquidation alive. Lean hogs showed spread trading between May and June, resulting in a substantial price divergence. Optimism will remain in the June contract on potential further demand from China. By Robin Schmahl DTN Analyst Cattle: Steady Futures: Lower Live Equiv: $149.26 -1.14* Hogs: Lower Futures: Mixed Lean Equiv: $ 88.93 +1.93** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue GENERAL COMMENTS: Technical weakness has dominated the cattle market. The market is severely oversold, but support remains elusive. The weakness has stemmed from lower cash this week with cash prices falling from $3.00 to $5.00 per cwt. Spillover selling from feeder cattle is affecting live cattle and vice versa, which continues to feed the selling frenzy. Futures could stabilize or bounce into the end of the week, but that may take a monumental effort and some friendly news to trigger short-covering. That seems unlikely based on the steep declines of the past two weeks.