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DTN Early Word Livestock Comments      10/04 06:15
   Livestock Futures Search for Support

   It was a bad Tuesday for cattle futures as liquidation ran rampant. Heavy
selling pushed futures lower, leaving chart gaps on the open in live cattle.
Feeder cattle futures lead the way with losses of over $5.00 in most contracts.
Hogs were generally lower but kept losses to a minimum.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower         Futures: Mixed     Live Equiv:   $220.07 -$1.79*

   Hogs: Steady         Futures: Lower    Lean Equiv:   $101.68 -$1.43**

   *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.


   It certainly looks like cattle reached a top with selling pushing futures
lower. Traders are uncertain over demand as interest rates are likely to
increase more this year, which may have an impact on consumer demand. A bearish
development in the cash market also triggered liquidation. It has been unusual
to see cash trade this early in the week, but some light cattle trade developed
$1.00 lower Tuesday. The recent pressure on futures may result in feedlots
letting go of cattle as they see holding out may not be of any benefit. Boxed
beef showed a substantial loss with choice down $3.01 and select down $1.39.
Could it be the top is in or is this just a large price correction? The rest of
this week will likely indicate what it is. As a result of the weakness in live
cattle, feeder cattle are trading lower at auctions with buyers reacting to
what is happening with live cattle.
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