Cattle for February delivery closed down 1.3 cents, or 1%, to $1.2455 a pound in trading at the Chicago Mercantile Exchange. The losses followed a heady run for cattle futures, which had added 6 cents a pound in just over two weeks. April cattle traded lower by 1.12 cent, or 0.9%, to $1.2805 a pound.

January feeder cattle bucked the day's trend in livestock. They set a record-high closing prices for the ninth time in 10 sessions as they finished up 0.3% to $1.53 a pound. Feeder cattle have soared to new heights as fast-tightening supplies of young cattle are teaming with lower feed costs to drive surge in market prices.

Cattle futures fell through key technical levels Thursday, a development that drew in further selling. February futures fell through three key support points as well as their 10-day moving average. April cattle also fell through some key support levels.

Some analysts and investors had been expecting a round of losses from profit-taking and technical movements. Fresh investments from outside funds have flowed into livestock futures in recent weeks, due in part to fast-shrinking supplies of cattle, which could force more consumers toward readily available pork. Big movements by outside funds can often lead to substantial one-day gains and losses.

Participants continued to reposition ahead of a U.S. Department of Agriculture supply report due Friday after pit trading. The annual cattle inventory report is expected to show the smallest U.S. cattle herd in 60 years. The report is due to be released at 3 p.m. EST (2000 GMT).

Cattle futures managed to hang onto the bulk of recent gains due in part to rising wholesale prices, which have been a signal to some investors that shrinking production by beef packers is forcing restaurants and retailers to pay more for meat.

Prices for cattle have surged in cash markets the last two weeks as processors have been competing for tight supplies. Traders are waiting to see whether that trend continues in cash markets this week, where trading has yet to get started.

The U.S. Department of Agriculture reported midday choice boxed beef prices up 28 cents at $185.13 and select up 79 cents to $180.20 a hundred pounds. Total sales were reported at 107 loads.

Cash cattle bids Thursday were unchanged from midweek with the latest quotes at $1.22 a pound in Texas and $1.21 to $1.22 in Kansas. Cattle owners there continue to price their animals at $1.28 or more a pound. Last week, cattle sold at mostly $1.26 a pound, with some in Texas early on at $1.25 and later a few up to $1.2725 a pound.

In Nebraska, owners are asking $2.08 on a dressed basis but no bids have been reported yet. Dressed sales last week were from $2.00 to $2.05 while sales on a live basis were from $1.25 to $1.28 a pound.