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DTN Early Word Livestock Comments      07/01 06:13
   CME to Launch a Beef Trim Contract

   The August live cattle contract becoming the lead-month did not have any
impact on the market from a bullish standpoint. The continued weakness was a
bit surprising. Hog futures continued sideways trade in later contracts, which
may be building greater support.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady           Futures: Mixed      Live Equiv: $286.98 +$0.32*

   Hogs: Higher             Futures: Higher     Lean Equiv: $101.99 -$2.17**

   *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 June live cattle contract went off the board on a positive note Tuesday,
settling at $258.20. The discount held by the August contract increased further
on Tuesday and was about $16.00 below the June. This could point to strength as
time moves forward and the cash market holds where it currently is. Some of the
recent selling might have been due to it being the end of the month and the end
of the quarter, as fund traders took some profits to close out their books. If
that were the case, they may renew buying Wednesday. Cash cattle have not yet
traded and may not trade Wednesday either. Boxed beef prices were mixed with
choice up $1.72 and select down $2.50. CME will launch beef trim futures and
options tied to 50% lean and 90% lean trim, the key inputs used to make ground
beef, hamburgers and meatballs. It signals beef price volatility has become big
enough that CME sees demand for a more precise risk-management product beyond
live cattle and feeder cattle futures. The contract will begin on July 20.