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DTN Early Word Livestock Comments      06/17 06:20
   Livestock Futures May Correct Thursday

   Wednesday was another day of cattle posting strong gains while hogs fell.
Both markets might be overdone based on their respective moves. It is uncertain
where traders may step back in and buy the break in hogs or if they will yet
this week.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady     Futures: Mixed        Live Equiv:    $240.80 -$1.63*

   Hogs: Higher       Futures: Mixed       Lean Equiv:    $129.23 -$6.17**

   * 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

   GENERAL COMMENTS:

   Cattle futures have certainly been on a roll with August and later contracts
again posting new highs. Cash traded Wednesday similar to Tuesday with cattle
in the South $122 to $123, $2.00 higher than last week, while the North traded
$193 to $197, $4.00 higher than last week. It is surprising packers are not
using faltering boxed beef as leverage to bid lower. However, they need cattle
and are paying up to get them. Boxed beef fell dramatically Wednesday with
choice cuts down $5.26 and select cuts down $8.32. When cash trades higher
early in the week, it is a good sign as cash trade did not need to hold out to
see whether buyers or sellers blink first. The market will be watching any
progress that might be made on the resumption of exports of beef from Argentina
as they continue to work on policies for reopening those exports. Weekly
exports may have some influence on futures trading Thursday, but not likely any
influence on cash for the rest of the week.
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