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DTN Early Word Livestock Comments      05/12 06:27
   Cattle Futures Will Need to See Higher Cash

   Cattle futures were able to perform well despite higher grain futures. There
is anticipation of higher cash developing this week, which has provided
support. Hogs may have run out of aggressive sellers of futures and with the
jump in hog prices Tuesday, traders may buy the break.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher   Futures: Higher   Live Equiv:   $229.09 +2.16*

   Hogs:  Higher   Futures: Mixed    Lean Equiv:  $119.79 +0.04**

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

   (The Live Cattle Equiv. 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


   Live cattle put in a strong day Tuesday, fueled mostly by continuing higher
boxed beef prices. Some cattle being traded in the North at slightly higher
prices for deferred delivery helped as well. This sets the potential for
possible higher cash this week. It is Wednesday and bids and offers should
surface, testing the resolve of both packers and feedlots. Packers do not want
to bid higher and are hoping the increase of grain prices again Tuesday and
overnight might push feedlots to sell cattle. Feedlots will decide if it is
worthwhile holding out for higher prices only to pay higher prices for the feed
they need to feed them for a few more weeks. Live cattle futures have made more
than a 50% price retracement and have accomplished that with a vengeance. That
level of support from futures could translate over into stronger cash.
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