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DTN Early Word Livestock Comments      01/30 06:11
   Mixed Trading Ahead of Tuesday's Report

   Feedlots held last week, resulting in steady to $1.00 higher cash. This week
will be another test of their resolve due to increasing feed prices. Hogs
adjusted to lower cash Friday in the February contract as it needs to move
closer to the index.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady        Futures: Mixed     Live Equiv:   $198.95 -$0.68*

   Hogs: Lower           Futures: Mixed     Lean Equiv:   $87.06 -$1.21**

   *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 paid for feedlots to hold out last week with Northern cattle trading
steady while Southern cattle traded $1.00 higher than the previous week. That
victory will increase their resolve again this week. However, the beginning of
the week shows higher grain prices. Traders will be looking ahead to the Cattle
Inventory report to be released Tuesday. This may keep price movement subdued
Monday and Tuesday. There is widespread belief the cow herd will be lower on
the report. A polling of some analysts showed the expectation that the beef
herd will be down 4.2%. If so, the beef herd on Jan. 1 would be down 1.265
million head from a year ago at 28.860 million head, which would be the lowest
beef cow herd on record. The calf crop is expected to be down 2.8% or a
decrease of one million head from a year ago. This would continue to support
cattle prices. The level of that support will be up to demand. Boxed beef has
been slipping over the past two weeks with both choice and select down $0.99
and $0.94, respectively, on Friday. The Commitment of Traders report showed
funds as net sellers of 9,456 futures contracts, bringing their net-long
futures position to 75,165 contracts.
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