DTN Early Word Livestock Comments      07/15 06:22
   Futures Could Bounce as Traders May Buy the Break

   The livestock complex suffered substantial losses Monday with significant
declines in both cattle and hogs. Beef demand seems to be showing a seasonal
downtrend as boxed beef prices decline. Hog futures and cutouts have been
unable to find support, indicating a lack of demand.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Lower       Live Equiv: $275.10 -$1.18*

   Hogs: Higher            Futures: Mixed        Lean Equiv: $119.81 +$0.38**

   *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:

   Cattle futures took it on the chin Monday, but it has not done any technical
damage to the charts. Traders reacted to the substantial decline in boxed beef
prices Friday. There were further losses Monday with choice down $1.57 and
select down $1.91. This weakness raises concerns of a peak in beef demand for
the time being. Cash cattle traded significantly higher last week, but that may
change as packers need to maintain their margins and may not be interested in
writing large checks for cattle this week. The weakness Monday increased the
discount of futures to cash. The question now is whether futures are leading
lower or if it is just a matter of correcting an overbought market.