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DTN Early Word Livestock Comments      10/25 08:07
   Cattle Futures Expected Higher

   Cattle futures fell on Friday in anticipation of a negative Cattle on Feed
report, suffering mostly triple-digit losses. However, such was not the case,
which may bring a rebound Monday. Hogs tried to hold their ground after two
days of plummeting prices. Support might be developing.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady   Futures: Higher   Live Equiv:   $211.24 +0.68*

   Hogs:  Steady   Futures: Mixed    Lean Equiv:  $105.24 -0.05**

   *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:

   Cattle futures fell sharply into the close as fear of a bearish Cattle on
Feed report swept through the market. That fear was unfounded as the report may
be considered somewhat friendly. Oct. 1 on feed numbers were 99% of last year
slightly below the average traded estimate of 99.3%. Placements were 97% of a
year ago compared to the average trade estimate of 101.4%. Marketings were 97%
compared to the average trade estimate of 97.2%. The most striking aspect of
the report is that placements were significantly lower than anticipated.
Although cattle and calves on feed were 1% below a year ago, it was the second
highest inventory for the October report since the series began in 1996. The
report is expected to trigger buying interest from traders due to actual
numbers versus estimates. Further support may be seen from higher boxed beef
prices on Friday with choice up $1.16 and select up $0.39. Cash is expected to
be quiet as usual for the beginning of the week.
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