DTN Early Word Livestock Comments      07/31 06:20
   Higher Cash Cattle Prices Expected

   Live cattle futures found substantial support from traders Wednesday with
nearby contracts outpacing feeder cattle. Light cash trade fueled the fire. Hog
futures found minor support but were unable to regain the losses of Tuesday.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher        Futures: Mixed        Live Equiv: $262.87 -$1.36*

   Hogs: lower           Futures: Mixed        Lean Equiv: $121.93 +$0.15**

   *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:

   It is not common for live cattle futures to outpace feeder cattle, but
traders became aggressive buyers Wednesday. Part of the strength was likely
from the trend remaining higher with no end in sight. Another part may be that
packers will need to pay more for cattle this week. There was some very limited
cash trade Wednesday at $5.00 higher. We must not view that as the level at
which cash will unfold, but it may have set the stage for feedlots to hold.
There is an exuberance being exhibited by traders despite the market being
technically overbought. Boxed beef prices continue to weaken, with choice down
$2.20 and select down $1.57. This is further tightening the margins of packers.