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DTN Early Word Livestock Comments      04/20 06:28
   Cattle Are Ripe for a Bounce

   Cattle futures have been unable to find a bottom even though futures are now
running at a discount to cash. Pressure stems from increasing grain prices and
fund liquidation. The market is oversold and may be overdone to the downside,
allowing for a price bounce. Hogs show their resiliency even after some bearish
news last week, indicating there may be more strength remaining is this market.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady   Futures: Mixed    Live Equiv:   $204.30 +0.07*

   Hogs:  Steady   Futures: Higher   Lean Equiv:  $120.59 +1.99**

   * 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:

   The bandage was not large enough to stop the bleeding Monday. Live cattle
futures slowed their descent, but pressure from feeder cattle still pushed them
into negative territory for the eighth day. Futures washed out early but
rebounded substantially from the lows. This might signal that futures have
fallen low enough to catch the interest of traders to buy back into the market.
After all, cash has remained strong with no indication of what this week may
bring. Boxed beef prices have also remained strong. It seems cattle futures
have more than compensated for higher grain prices. April futures are trading
at a discount to cash with only 1 1/2 weeks remaining to trade. The Commitment
of Traders report showed funds as net sellers of 4,653 contracts, trimming
their net-long positions to 87,231 contracts.
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