DTN Early Word Livestock Comments      04/26 06:13

   Cash Cattle Trade Steady to Higher

   Cattle futures uncovered strong buying interest after higher cash trade 
developed in the North. That was enough to turn traders more bullish on the 
market. Hogs took a beating due to lower cash with packers likely finished 
buying for the week.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady        Futures: Higher    Live Equiv:   $219.39 +$0.28*

   Hogs: Higher         Futures: Mixed    Lean Equiv:   $103.45 +$0.22**

   *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 was a negative beginning for cattle but as further cash trading 
developed, cattle futures turned higher. Northern dressed cattle traded $1 to 
$2 higher generating interest in purchasing futures. The stage is likely set 
for cash activity today with Southern cattle likely to trade steady and 
Northern cattle higher. This was not expected earlier this week and the result 
of feedlots holding out due to tight supplies. More live cattle and feeder 
cattle contracts closed their chart gaps before futures turned higher, but 
later contracts still show gaps from a week ago. Weekly export sales were lower 
than the previous week and may have limited some possible gains. Boxed beef 
prices were mixed with choice up $1.18 and select down $0.76.  

   Hog futures were unable to find support as packers were not aggressive in 
the cash market. The National Direct Afternoon Hog report showed cash down 
$2.78 as most of the hogs needed this week had been purchased. Weekly export 
sales were better than the previous week 28,800 mt, but that failed to provide 
support to futures. Pork cutouts were up $0.22 showing at least steady retail 
demand. The selling pressure on Thursday took away most of the gains this week 
with contracts unable to retest the contract highs. Futures may trade mixed 
ahead of the weekend.

   BULL SIDE                                 BEAR SIDE
   More cattle contracts were able to        The differed contracts in live
1) close the chart gaps that had been     1) cattle and feeder cattle futures
   below the market giving technical         hold chart gaps below the market
   traders confidence in buying futures.     that may be filled.
                                             The news of the potentially more
   Higher cash cattle trade should           widespread impact of the bird flu
2) improve the price outlook as it        2) virus in dairy cattle than what
   indicates demand remains strong and       has been reported may keep traders
   supplies remain tight.                    cautious and upside potential
                                             limited.
   Packers may be generally done buying
   for the week but pork demand remains      The failure of hog futures to
3) strong and slaughter continues to run  3) retest the contract highs may keep
   higher than a year ago. Hog weights       futures in a wide sideways trading
   declined by one pound from the            pattern.
   previous week's average of 287 pounds.
   A drop in hog futures may be viewed as    Lower export sales in the past two
   a buying opportunity by traders as        weeks may indicate international
4) funds seem willing to buy the break    4) interest has declined due to
   due to positive fundamentals.             higher pork prices. This may be a
                                             limited factor of price potential.

   For our next livestock update, please visit our Midday Livestock comments 
between 11 a.m. and noon CST. Also, stay tuned to our Quick Takes throughout 
the day for periodic updates on the futures markets.

   Robin Schmahl can be reached at rschmahl@agdairy.com




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