DTN Early Word Livestock Comments      07/07 06:12
   Hogs Futures May Find Further Support

   The cattle complex appeared to be struggling with new lows again on Monday.
Some liquidation is taking place. Hogs held and continue to build support.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower           Futures: Mixed      Live Equiv: $282.49 -$0.64*

   Hogs: Higher            Futures: Higher      Lean Equiv: $102.75 +$0.19**

   *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:

   Live cattle were able to post minor gains on Monday except for the August
contract. Another day of lower highs and lower lows gives the impression that
some liquidation is taking place. The market seems to have run out of steady
bullish information, which is needed for consistent support at these lofty
levels. Cash weakness is a reality, and further weakness is expected this week.
Boxed beef prices have been weakening, with choice down $0.59 and select down
$1.56 on Monday. Prices remain at high levels, but the inability to show
further gains is increasing the caution of traders. Feeder cattle futures
closed lower on Monday with futures declining faster than they increased.
Feeder cattle remain in strong demand with premiums being paid in many cases
for cattle. The Commitment of Traders report showed the fund traders reducing
their long positions by 6,143 contracts to a net long of 119,440. Feeder cattle
showed selling of 88 contracts, reducing their net-long position to 15,607.