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DTN Early Word Livestock Comments      05/28 06:24
   Cattle Futures Expected Higher Tuesday

   The Cattle on Feed report on Friday was somewhat neutral with the numbers
near expectations. The strength of cash cattle last week may provide support to
the market this week. Hog futures may see some buying interest after the
weekend as retail demand may increase to restock pork supplies.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Mixed     Live Equiv: $228.59 +$0.58*

   Hogs: Higher            Futures: Higher    Lean Equiv: $104.99 +$0.44**

   *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 were higher for the week but coasted into the weekend ahead
of the Cattle on Feed report. The report was considered neutral to a bit
friendly in the long term. To some extent, this may have been already factored
in as futures were higher for the week, but most of the gains were likely due
to higher cash cattle trade. However, the numbers will remain tight according
to the report. Southern cattle traded $1.00 higher while Northern dressed
cattle traded as much as $5.00 higher with the average price in Nebraska
reaching an all-time high. It is interesting cattle futures are not at new
contract highs even though cash is at a record high. Boxed beef prices were
higher with choice up $0.61 and select up $1.64. Fund traders increased their
long positions by 7,843 futures contracts on the Commitments of Traders report,
bringing their net-long futures positions in live cattle to 49,463 contracts.
The funds reduced their net-long futures positions in feeder cattle to 4,204
contacts, a decrease of 207 contracts.
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