DTN Early Word Livestock Comments      07/21 06:15
   A Bounce May Trigger Further Liquidation

   Cattle finally found sufficient support to result in a higher close. The
oversold market likely triggered short-covering. Hog futures were mixed, but
maintained the recent gains as traders have turned more optimistic over demand.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower           Futures: Mixed    Live Equiv: $272.12 $1.66*

   Hogs: Higher            Futures: Mixed    Lean Equiv: $109.65 -$1.31**

   *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 have been significantly oversold. Short-covering likely
spread through the market, resulting in live cattle contracts closing back
above the support level penetrated on Friday. The downtrend remains intact, but
the market bounce may slow the selling and finally find support. Boxed beef
prices were higher after significant weakness over the past few weeks. Choice
boxed beef increased $3.29, with select up $0.16. The strength on Monday does
not mean the market has found a bottom, but it does provide hope that
liquidation may slow with prices low enough to increase buying interest again.
After all, cattle supplies remain tight, and demand is likely to improve over
time. Futures price activity may be sideways this week as traders look ahead to
the Cattle on Feed report to be released on Friday.