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DTN Early Word Livestock Comments      02/06 06:05
   Early Cash Cattle Trade Points to Lower Prices

   The liquidation of the past week ran its course with traders willing to step
back into the cattle market. The selling was a bit overdone relative to the
cash market, but cash looks weaker this week. Hog futures were higher Wednesday
with a second day of solid gains.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower         Futures: Mixed        Live Equiv: $238.86 -$3.31*

   Hogs: Lower          Futures: Mixed         Lean Equiv: $99.48 -$0.93**

   *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 pushed higher after a week of aggressive liquidation. This
was good as it corrected an overbought market. The fundamentals did not change
as cattle supplies are tight and will remain that way for a time. Concern over
the impact of tariffs on demand left traders uneasy and triggered the selling.
Much of that has now been digested. However, the recent pressure on futures and
the uncertainty in the market may result in feedlots being willing to move
cattle more aggressively rather than holding out for higher cash that may not
be attainable. Some light cash trade took place $1.00 to $3.00 lower. The
recent decline in futures and the developing tariff situation may be a warning
shot over the bow. Boxed beef prices were lower on Wednesday with choice down
$5.39 and select down $3.08.
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