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DTN Early Word Livestock Comments      03/27 06:18
   Trader Psychology Drives Market

   Cattle futures showed huge losses Tuesday as concern moved into the market
and traders liquidated long positions. Cattle futures eliminated all gains
since January. Hogs held up well, minimizing the spillover pressure from
cattle. Traders are preparing for the upcoming report.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady        Futures: Mixed    Live Equiv:   $229.05 -$0.25*

   Hogs: Lower          Futures: Mixed   Lean Equiv:   $101.28 -$0.41**

   *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 pancaked lower as long liquidation gripped the market and
sell stops were hit. As futures declined, increased technical selling took
place. Some of the pressure stemmed from the bearish numbers on the Cattle on
Feed report, but some was fear of what the discovery of bird flu in dairy
cattle could mean for the industry. The concern over bird flu was just a
psychological reaction as it really could be construed as bullish to the
market. If it becomes more of a widespread issue, it could be very bullish as
affected cattle would lose weight, which would delay marketing and tighten beef
supply further. It could also impact nursing calves. However, uncertainty plays
a large role in the commodity markets. Cattle futures did bounce back from the
lows, which could bring buyers back in if cash would trade higher again this
week. Boxed beef prices were mixed with choice up $0.20 and select down $1.70.
Cash cattle have yet to trade this week.
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