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DTN Early Word Livestock Comments      06/24 06:17
   Cattle Futures Expected to Open Lower Monday

   Live cattle futures drifted into the close Friday as traders did not have a
good handle on cash and the Cattle on Feed report was yet to be released. Cash
did trade higher after the close and the report was bearish. Hogs followed a
similar pattern as cash and cutouts were mixed, providing no direction.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Mixed     Live Equiv: $235.28  -$0.29*

   Hogs: Steady           Futures: Mixed     Lean Equiv: $104.88 +$1.18**

   *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:

   Cash cattle finished the week with strong gains. Live cattle in the South
traded $3.00 to $5.00 higher with Northern dressed cattle trading $4.00 to
$6.00 higher. That is an incredible jump in price as packers had to step up due
to the need to maintain slaughter and meet demand. To begin Friday, beef export
sales were good at 14,900 metric tons (mt), up 24% from the previous week. This
provided some support, mainly to the nearby months. Cash cattle did not trade
much before the close of the futures market but optimism grew over better cash.
However, that optimism remained in check due to the Cattle on Feed report, and
rightly so. The report was considered bearish, but there is disbelief over the
level of placements. Placements in May were 104% with the average estimate at
98.3%. This was above the top of the range of 102.4%. This was very bearish but
not without controversy. Many expressed disbelief placements were that high.
Maybe there are more cattle out in the country than the market has given the
impression there are. After all, cattle weights are significantly higher than a
year ago. On-feed numbers were 100.0% of a year ago and slightly higher than
the estimate of 98.9%. Marketings in May were 100%, down slightly from the
estimate of 100.3%. This should result in lower futures on the open, but that
may be short-lived as strong cash and traders discounting the report may
overcome the bearishness. Boxed beef was lower Friday with choice down $0.48
and select down $1.29.
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