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DTN Early Word Livestock Comments      05/07 06:15
   Uncertainty to Dominate Markets

   Thursday's fairly quiet trade may carry over to Friday. Cattle will be
looking at another day of increasing grain prices based on overnight activity.
Hogs might see a somewhat uneventful day for cash.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady   Futures: Mixed       Live Equiv:    $224.43 +$1.31*

   Hogs: Steady     Futures: Higher      Lean Equiv:    $120.47 +$1.95**

   * 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:

   It stands to reason live cattle futures would have closed higher Thursday
due to ever increasing boxed beef prices. However, the disconnect between cash
and boxed beef is large with packer profits around $719 per head. Yet, they
have been able to procure cattle this week at mostly steady prices averaging
$119.12. Consumers want beef and packers need to keep the market supplied. They
are using the advantage of ever-increasing feed prices to their benefit.
However, high prices may be having an impact on the export market. Weekly
exports showed net sales of only 16,900 metric tons (mt). This was 28% below
the previous week and 18% below the four-week average. Price might be getting
too high for the international appetite. This may make more beef available to
the domestic market. Technically, live cattle futures are attempting to build a
level of support with futures moving in a fairly sideways pattern over the past
two weeks.
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