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DTN Early Word Livestock Comments      07/17 06:21
   Hog May See Further Short-Covering Wednesday

   Cattle futures closed higher Tuesday but the interest seemed to lack
conviction and rightly so due to the weakness of boxed beef and the upcoming
Cattle on Feed report. Hogs finally had a strong day with nearby months
outpacing deferred contracts.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower         Futures: Mixed       Live Equiv: $233.08 -$1.82*

   Hogs: Higher        Futures: Higher       Lean Equiv: $106.78 +$2.58**

   *Based on the formula estimating live cattle equivalent of gross packer
revenue. (The Live Cattle Equiv. The 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 showed gains Tuesday, but traders seemed to lack conviction
with contracts held to double-digit gains. The potential for lower cash cattle
prices again this week will keep traders cautious. They want the market to go
higher due to tight cattle numbers, but the bottom line is demand. Boxed beef
has shown weakness and Tuesday was no exception. Choice cuts fell $2.23 and
select was down $3.23. Along with the concern over demand, the Cattle on Feed
report will be released Friday after the close. The estimates are for cattle on
feed on July 1 to be 101.2% compared to a year ago. Placements are estimated at
97.0% with cattle marketed in June at 91.8%. Cash cattle may not trade until
late in the week as is usually the case when it is a report week. Feeder cattle
are seeing some demand weakness at auctions with lower prices being paid for
animals.
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