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DTN Early Word Opening Livestock       07/25 06:00
   Cattle Futures Seem Likely to Open with Mixed Prices

   Expect the cattle complex to begin pit trading this morning with mixed
action thanks to a late-week combination of residual buying interest and profit
taking. Lean hog contracts should open moderately lower, pressured by
follow-through selling and pork demand worries.

By John Harrington
DTN Analyst

Cattle: Steady/firm w/Thurs Futures: mixed Live Equiv $176.43 + $2.37*
Hogs: Steady    Futures: 25-50 LR  Lean Equiv $140.08 - $1.29**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue


   Despite their willingness to write significantly larger checks this week,
packers have not succeeded in generating eye-catching trade volume totals.
While movement in the North looks no better than moderate, negotiated business
in Kansas and Texas still looks quite light. Accordingly, we could easily see
another round of light to moderate trading today (especially in the South)
before packers head for the locker room. The balance of showlists are priced
near the top end of yesterday's price surge (e.g., $262 plus in the South,
$164-165 in the South). Unless cattle buyers somehow find the energy and powder
to significantly augment weekly trade volume totals today, our sense is that
most will soon find themselves to be short bought again early next week. The
July 1 on feed and semi-annual inventory reports will be released this
afternoon at 2:00 CST. On feed estimates call for June placement to be off
4-%5%, June marketing to be down by 2%, and the total bunk line population to
be about 2% smaller. Live and feeder futures seem set to open on a mixed basis
thanks to bull spreading and late week profit taking.
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