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DTN Early Word Livestock Comments      05/23 06:25
   Uncertain Beginning to Week

   Cattle floundered, not only because of futures not being able to find
support in general, but also due to the Cattle on Feed report that was to be
released after the close on Friday. Feeder cattle continued to set new contract
lows. Hog futures pushed higher with June leading the way due to strong cash
and higher cutouts.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower       Futures: Higher    Live Equiv:    $194.39 -$0.30*

   Hogs: Higher        Futures: Mixed     Lean Equiv:    $114.73 +$3.85**

   *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


   The awaited Cattle on Feed report was released on Friday and was not quite
what the trade anticipated. Both on feed at 102% and placements at 99% were
higher than anticipated. This is the second consecutive month that the
estimates for placements were significantly below the actual. This is not a
supportive report in light of the inflationary period we are in as well as the
concern about a recession. If slaughter pace slows somewhat, cattle may back up
into the market. Carcass weights declined last week and still cash is
struggling as packers had purchased sufficient head for the week as well as
some for the next few weeks. Cash does not look promising this week with some
initial calls for another $1.00 to $2.00 lower. However, if futures do what
they often do after a report, they may move higher Monday. The market may have
already factored in the report with the weakness last week resulting in some
short-covering Monday. Boxed beef prices were mixed on Friday with choice up
$0.47 and select down $1.04.
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