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DTN Early Word Livestock Comments      05/17 06:22
   Livestock Faces a Tough Week

   Last week's closing in the livestock complex did not paint a positive
picture for this week with the exception of feeder cattle. Otherwise, some of
the fundamentals for both cattle and hogs has turned more bearish. Hogs have
the benefit of tighter supplies that could provide support, but such is not the
case for cattle.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower   Futures: Mixed    Live Equiv:   $230.52 -0.49*

   Hogs:  Lower   Futures: Higher   Lean Equiv:  $122.40 -0.38**

   * based on formula estimating live cattle equivalent of gross packer revenue.

   (The Live Cattle Equiv. 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:

   It seemed last week was a brutal week in cattle futures, but overall, that
was not the case. Feeders closed substantially higher for the week helped
immensely by falling corn prices. Live cattle really did not change much for
the week after significant volatility. Live cattle were driven lower after
rallying during the first half of the week by the disappointment of cash,
dismal export sales, and a plant not running on Saturday. It certainly was
different for boxed beef prices as they exploded higher, gaining $10.55 for
choice and $8.57 for select cuts for the week. That certainly increases the
frustration for those who raise cattle. The bright spot is that corn prices
fell dramatically since the World Agricultural Supply Demand report. But that
is little consolation when the outlook for cash this week does not look any
better than last week. It may be a victory if cash can hold steady with last
week, but the potential for lower prices are also a possibility.
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