DTN Early Word Livestock Comments      07/08 06:21
   Mixed Trade Expected as Traders Wait for Cash

   Live cattle may return to test the highs, even though cash is questionable
this week. The packers will want to maintain their strong margins and keep cash
at steady or lower levels compared to last week. Hogs showed a significant
divergence between the July and later contracts. The packers were aggressive to
begin the week.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Mixed         Live Equiv: $284.65 +0.42*

   Hogs: Higher           Futures: Higher        Lean Equiv: $119.41 +$3.28**

   *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 no evidence over the concern of last week when it was
announced that imports of cattle from Mexico were to resume on Monday. Traders
realized that it would not significantly alter the volume of cattle available
to the market. Interestingly, cash traded lower over the past month, but live
cattle futures seem poised to revisit the highs. The feeling is that cash will
trade steady at best this week as the packers may not need to be aggressive.
They also intend to maintain their recent increase in margins. Boxed beef
prices were mixed on Monday, with choice up $1.23 and select down $0.91. Feeder
cattle moved to new contract highs in the August, September, October and
December contracts. The Commitment of Traders report showed fund traders
selling 4,394 live cattle futures contracts, bringing their net-long position
to 123,159 contracts. There were 1,597 contracts sold in feeder cattle,
reducing the net-long position to 32,672 contracts.