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DTN Early Word Opening Livestock       08/23 06:14
   Cattle Trade Looking Toward Cash Trade

   The firm undertone in live cattle trade is developing through the week, and
could help to solidify additional gains Friday. Lean hog futures continue to
remain weak, fueled by renewed concerns of additional fundamental pressure.

By Rick Kment
DTN Analyst

Cattle: Steady to Higher   Futures: Higher   Live Equiv $154.12 -0.87*
Hogs:   Lower              Futures: Lower    Lean Equiv $ 84.80 -1.30**

*   based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue


   The lion's share of cash cattle trade has been delayed until Friday since
limited packer interest showed up just in the last couple of days. So far, most
feeders are unwilling to accept current bids that are steady-to-firm with last
week's price levels. Given the recent surge in beef values and this week's slow
but steady growth in futures trade, it is expected that prices will show
improvement unless overall futures markets would happen to fall apart through
the day. Futures trade is expected to remain generally firm as follow-through
support is moving back into the complex. Traders will get their first chance to
trade Thursday's Cold Storage report, which reported 455 million pounds of beef
in warehouses. This is a 12% jump from June levels but is 6% under year-ago
levels. The indication that year-over-year clearance remains good, with the
larger amount of cattle inventory through the year remaining positive, but
traders are likely to be uneasy at the size of month-over-month growth, and
what this may indicate for short-term beef demand. It is expected that traders
will not spend much time on the Cold Storage report with the Cattle on Feed
report released after trade closes Friday. This will likely cause some
additional market adjustments ahead of the report.
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