DTN Early Word Livestock Comments      07/09 06:12
   Hog Futures May Show Further Short-Covering

   There was quite the volatility in cattle futures on Wednesday, with live
cattle closing lower and feeder cattle closing higher. Hog futures had a fire
lit under them, closing with strong triple-digit gains in what could be the
beginning of a much-awaited retracement.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower           Futures: Lower     Live Equiv: $279.29 -$2.85*

   Hogs: Lower             Futures: Mixed     Lean Equiv: $104.66 +$0.25**

   *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:

   The August live cattle contract initially fell to support before strong
buying surfaced, resulting in a strong bounce. Feeder cattle did not bounce
from support, but followed the pattern of live cattle closing with triple-digit
gains in the August and September contracts. This may set the stage for the
beginning of a retracement of the losses of the past two weeks. However, the
continued weakness of boxed beef prices does not bode well for near-term
demand. Packers are expected to remain tight-fisted and have shown a few bids
as much as $10.00 lower. I do not believe feedlots will be willing to sell
cattle at that much of a loss, but the consensus is that cash will be lower.
Boxed beef prices on Wednesday showed choice down $4.57 and select down $2.80.
Although cattle closed significantly off their lows on Wednesday, futures
remain in a downtrend.