DTN Early Word Livestock Comments      07/27 06:10
   Cattle Imports From Mexico to Resume

   Cattle futures closed higher on Friday as traders had positioned themselves
before the Cattle on Feed report. The report was neutral and will likely have
limited influence on the market.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower           Futures: Lower     Live Equiv: $266.02 -$1.23*

   Hogs: Higher            Futures: Higher    Lean Equiv: $111.18 +$0.15**

   *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:

   The Cattle on Feed report was neutral and may have limited influence on the
market. Cattle on feed on July 1 was 102% and slightly below the average
estimate of 102.2%. Placements in June were 97%, with the average estimate at
98.8%. Even though placements were lower, they were well within the estimated
range. Cattle marketed in June were 97%, with an average estimate of 97%. The
greater influence Monday will likely be the continued weakness of cash, boxed
beef and the reopening of the Mexican border. Last week, Southern cattle traded
$7.00 to $8.00 lower. Northern dressed cattle traded $12.00 to $15.00 lower.
Boxed beef prices on Friday were lower, with choice down $1.63 and select down
$2.04. Choice has now fallen to $361.24 and select to $346.71. The big news is
that USDA is lifting a ban on live cattle imports from Mexico. Trade will
restart at the Douglas, Arizona, port in about 30 days, with two more ports in
New Mexico expected later. Rollins said the situation is under control and that
Mexican feeder cattle will move through a disinfectant dip vat when entering a
U.S. port of entry. It is uncertain how much of this is already factored into
the market. The Commitment of Traders report showed the fund traders as net
sellers of 22,454 live cattle futures, reducing their long position to 75,681.
They were net sellers of 1,941 feeder cattle futures, reducing their net-long
position to 9,345 contracts.