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DTN Early Word Livestock Comments      07/24 06:19
   Markets Continue to Adjust to Fundamentals

   The livestock complex showed another strong day Tuesday as optimism was
prevalent. There is anticipation for possible better cash trade in cattle this
week. Hogs continue to see short-covering as bullish fundamentals continue to
impact trading.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady         Futures: Lower       Live Equiv: $229.07 -$0.46*

   Hogs: Lower           Futures: Higher      Lean Equiv: $109.45 -$1.02**

   *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:

   Traders became more confident cash cattle might trade higher this week,
causing the market to reduce the discount they were holding to cash. Steady
cash trade this week would be considered friendly to the market. Packers have
some cattle purchased ahead, which may leave them less willing to match the
higher offers of feedlots. Some limited cash trade was seen in Kansas at $1.00
lower than last week. This does raise some concern as continued lower boxed
beef prices may be the deciding factor. Tuesday's boxed beef prices were lower
with choice down $0.23 and select down $1.67. This may cause the packers to
hold the line on what they are willing to pay for cattle.
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