DTN Early Word Livestock Comments      08/07 06:10
   Weekend Short-Covering Is a Possibility

   Cattle futures succumbed under substantial pressure tied to weakness in
choice boxed beef and technical selling. Hog futures showed further weakness as
traders remain uncertain about continued demand.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher           Futures: Higher    Live Equiv: $267.69 -$1.67*

   Hogs: Higher             Futures: Mixed     Lean Equiv: $105.95 -$1.79**

   *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:

   It was surprising to see the selling pressure on cattle futures in the face
of stronger cash cattle trade. Southern live cattle traded $2.00 to $3.00
higher on Thursday while Northern dressed cattle sold $3.00 to as much as $5.00
higher than the previous week. So why the sell off? The choice boxed beef price
in the morning report was down $5.10, coupled with the inability of futures to
push higher even though higher cash cattle trade had been expected. Selling
pressure pushed futures low enough to trigger stops, resulting in contracts
pancaking lower. Once the selling gains momentum, it can be difficult to stop.
Logically, futures should rebound Friday unless traders decide to remain
sidelined into the weekend. Afternoon boxed beef prices were mixed, with choice
down $4.11 and select up $1.72.