DTN Early Word Livestock Comments      08/01 06:21
   Cash Cattle Are Expected to Trade Higher

   The castle complex came under severe pressure Thursday, which seemed to be
more technical than anything else. An overbought market eventually corrects,
and that is what took place. Hogs defied any spillover pressure and cash
weakness to post limited gains.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher        Futures: Higher        Live Equiv: $262.63 -$0.24*

   Hogs: lower           Futures: Mixed        Lean Equiv: $119.93 -$2.00**

   *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:

   Thursday was a day of reckoning for cattle futures. It indicates that a
market reaching such lofty levels has increased vulnerability to news that
creates uncertainty. The announcement of a tariff on Brazilian beef created
confusion over what that could mean for beef prices. Added to that was an
overbought market that was ripe for a correction. Traders had stops below the
market to limit downside risk. The weakness of futures was sufficient to
trigger those stops, causing the market to pancake lower as other layers of
stops were triggered. Limited cash cattle trading activity was noted in the
North on Thursday at $3.00 higher than last week. In reality, higher cash and
the potential of lower Brazilian beef imports should be supportive to the
market. The weakness in futures might be overdone. Boxed beef prices were mixed
with choice down $0.67 and select up $0.46.