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DTN Early Word Opening Livestock       10/20 06:41
   Cattle Futures Focused on Potential Follow-Through Pressure

   Cattle futures are expected to walk the line between early morning
short-covering and follow-through liquidation early Thursday morning, although
initial volume is expected to remain light. Mixed trade is expected in lean hog
futures as narrow trading ranges are likely to redevelop across the complex.

By Rick Kment
DTN Analyst

Cattle: Steady to $2 LR   Futures: Mixed   Live Equiv $121.68 - 1.71*
Hogs:   Steady to $1 LR   Futures: Lower   Lean Equiv $ 78.17 - 0.82**

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


   Cash cattle trade still needs to be done with the only reportable trade seen
Wednesday being sales of over 11,000 head of cattle on the fed cattle exchange.
Packer bids are expected to be reestablished early Thursday steady to lower
from where they were midweek following the pressure seen in futures trade and
beef values. Even though interest will start to improve through the day,
overall trade activity may be delayed until later in the week and potentially
after the Cattle on Feed report is released Friday afternoon. Cattle futures
are expected to start out defensive following the sharp late-day pressure,
which quickly developed in live cattle and feeder cattle markets Wednesday
afternoon. The potential for additional long-term pressure developing through
the end of the week could eliminate recent market support and cause significant
technical damage. Potential short-covering is possible given the fact that
trade activity is likely to remain light through the morning.
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