DTN Early Word Livestock Comments      02/23 06:18
   Cattle Futures Are Expected to Open Higher

   Traders were uncertain over the cash cattle trade and the Cattle on Feed
report. This resulted in futures closing lower on Friday. Hogs posted limited
gains as buying interest seems to outweigh the choppiness of cash and cutouts.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Higher     Live Equiv: $269.44 +$0.99*

   Hogs: Lower             Futures: Mixed     Lean Equiv: $101.39 -$0.67**

   *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 closed lower despite ongoing positive fundamentals. Traders
decided to err on the side of caution ahead of the cash trade and the Cattle on
Feed report. Surprisingly, traders were cautious despite some light trading
ahead of the close, indicating higher cash trade. History has shown that even a
negative Cattle on Feed report has had a negative reaction of limited duration.
Yet, traders were cautious. Cash cattle traded higher, with Southern cattle
$1.00 to $2.00 higher. Northern dressed cattle traded $6.00 higher. The Cattle
on Feed report was neutral to slightly bullish, with Cattle on Feed at 98% of a
year ago, placements at 95%, and marketings at 87%. The on-feed and marketings
were close to expectations, while placements were 1.7% below expectations,
providing the bullish aspect of the report. Cattle futures should trade higher
today as traders focus on the fundamentals. Boxed beef prices were higher, with
choice up $1.53 and select up $0.95. The Commitment of Traders report showed
the fund traders adding 8,413 live cattle futures contracts, bringing their
net-long position to 115,052. Traders added 797 long feeder cattle futures
contracts, bringing their net-long positions to 18,766.