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DTN Early Word Opening Livestock       07/17 06:48
   Mixed Trade Expected

   Technical traders may feel the live cattle market may be poised to see
further losses as the market corrects from its overbought status. Without cash
being tested yet this week, futures seem to be unwilling to add further price
premium. The upcoming Cattle on Feed report may also keep market volatility to
a minimum as traders positions themselves ahead of the report. Hog futures
showed a surprising divergence between August and October as spread trading

By Robin Schmahl
DTN Dairy Analyst

Cattle: Steady to Higher   Futures: Mixed    Live Equiv: $136.75 -0.10*
Hogs:   Steady             Futures: Higher   Lean Equiv: $ 80.66 +2.90**

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


   There were no cash cattle traded Tuesday as packers and feedlots have so far
been unwilling to budge. The inability of cattle futures to reach to higher
ground may make it difficult for feedlots to make a case for higher cash
business to be done. Although futures are still in an uptrend, there is concern
a temporary top may be made as the market corrects from being overbought.
Cutout values will need to find support in order to add support to cattle
futures. Beef supply is expected to decline from the fourth quarter of this
year into the first quarter of next year with December and February futures
showing that.
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