MFA Incorporated 201 Ray Young Drive Columbia, MO 65201 573-874-5111

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DTN Early Word Livestock Comments      07/28 06:21
   Margin Liquidation May Futures Pressure Cattle

   Cattle traders did not like the news of the U.S. border reopening for cattle
imports. Deferred feeder cattle futures locked limit down by the close. Hog
futures were under pressure from the beginning as the market seems to be
correcting from being overbought.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower           Futures: Lower     Live Equiv: $266.55 +$0.53*

   Hogs: Higher            Futures: Higher    Lean Equiv: $111.00 -$0.18**

   *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 focus was on reopening the U.S. border to feeder cattle imports, and the
trade did not like it. The weakness seen over the past few weeks was clearly
due to the weakness of boxed beef and lower cash. Even though the reopening of
the border had been a possibility discussed for some time, it caught traders
off guard. It was Katy-bar-the-door selling at the beginning of trading. The
deferred contracts closed under substantial pressure, with feeder cattle limit
down. It is likely further liquidation will take place as margin calls may
force more traders out of the market. Boxed beef prices were mixed, with choice
up $1.65 and select down $1.55. Higher choice boxed beef may have little
influence on the trade Tuesday.