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DTN Early Word Livestock Comments      06/14 06:05
   Cattle Futures Expected Higher

   The cattle complex showed strong gains Friday as traders took advantage of
lower grain prices to buy the market. The same may hold true Monday as grains
were significantly lower again overnight. Hogs may have a slow, cautious start
to the week as traders wait for direction of cash and confirmation of trend.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady     Futures: Higher       Live Equiv:    $243.84 -$1.30*

   Hogs: Steady       Futures: Mixed       Lean Equiv:    $139.26 -$1.51**

   * 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:

   The livestock complex showed a reversal of prices between cattle and lean
hogs. Lean hogs have always been the market to watch with weakness short-lived
even on an intra-day basis. It was just the opposite Friday with cattle posting
the double-digit gains while hogs posted double-digit losses. This was a bit
surprising as a top may have been reached for boxed beef. Choice cuts were down
moderately with a decrease of $0.59 while select cuts plummeted $5.19. If that
did not get the attention of traders, then nothing will. However, just because
boxed beef is declining, it does not necessarily mean cash will falter. Cash
was able to hold last week and there is some expectation cash might be steady
this week. There will be no indication of bids or offers Monday as they will
look over showlists. It might be tough to anticipate higher cash, but steady
cash should be well within the range of possibilities. Demand for beef remains
strong and lower beef prices might increase demand, resulting in packers
needing to remain aggressive.
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