KANSAS CITY (Dow Jones)--Live cattle futures Thursday are narrowly mixed in the early minutes of pit trading after higher cash prices Wednesday and the hedge lifting that accompanies cash action extended price gains overnight.

December live cattle recently were 0.27 cent a pound, or 0.27%, higher at $1.0440 while February was up 0.12c, or 0.11%, at $1.0767. January feeder cattle were up 0.35c, or 0.29%, in electronic trading at $1.2202 and March was up 0.37c, or 0.31%, at $1.2400.

Packer buyers were not shy about moving cash prices from $1.01 up to $1.04 Wednesday, but further cash trading of any size likely will have to wait until next week, traders said. Volumes sold this week were said to be moderate to heavy, ranging from an estimated 25,000 head in Texas to around 60,000 in Nebraska.

Prices in the Plains ranged from $1.01 a pound on a live basis up to $1.04 and were about $1.64 to $1.65 a pound on a dressed basis.

Cash prices for this week now are priced in to the futures market, said Mark Clark, owner of Professional Commodities Management.

Futures, then, will be left to trade on prospects for beef exports and the influence of currency and financial markets. The general feeling among world investors is that the U.S. economy will continue to recover from its recession, leading to background support for the dollar and forecasts for rising stock markets.

In the meantime, talk of improved beef export demand that circulated among traders Wednesday may continue and support cattle markets into 2011, they said.

Feeder cattle were slightly higher in electronic trading, reflecting mixed live cattle futures and weakening corn prices.

Many traders continued to be nervous about deliveries after another 45 contracts were tendered overnight and 33 more were retendered for delivery, brokers said.

Those cattle were being delivered because the futures price was higher enough than the latest cash price to make it profitable, brokers said. And since most investors in cattle futures are not able to accept delivery of cattle, they will tend to exit their long positions in December before it expires on Dec. 31.

As evidence that traders are getting out of their December contracts, the CME Group reported that the number of open contracts in the December delivery month declined 3,623 contracts Wednesday, and even though all other delivery months rose in open interest, the gains were not enough to offset the declines in December.

Further weakness in beef markets could limit gains in cattle futures, brokers said. There was talk of possible new export orders Wednesday, and this could boost wholesale prices despite worries that consumers will begin to shift away from beef as retail prices rise to accomodate historically high wholesale prices.

The USDA reported its wholesale choice composite boxed beef carcass price was down $0.93 a hundred pounds at $158.92, while select beef was up $0.10 at $153.20. The volume of steaks and roasts sold was 265 loads, and there were 74 loads of trimmings and coarse grind product reported.

The latest HedgersEdge packer margin index is a plus $0.20 a head, compared with the previous estimate of a plus $4.70. This is a rough estimate of packer returns on the cattle they slaughter and process expressed in the form of an index.

The USDA estimated slaughter through Wednesday at 390,000 head, up from 380,000 a week earlier and up from 377,000 a year ago.

Urner Barry's Yellow Sheet, a trade publication, Wednesday said wholesale prices for rounds, from which roasts are cut, have firmed, and ground beef continues to escalate. Holiday cuts remain under pressure.

By Lester Aldrich, Dow Jones Newswires; 913-322-5179; lester.aldrich@dowjones.com