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DTN Early Word Livestock Comments      06/02 06:18
   Further Strength Expected

   The cattle market exploded Thursday as cash cattle traded significantly
higher. Once cash trade developed, futures pushed higher, bringing feeder
cattle along with it. Hogs showed gains only in June with later contracts
lower.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady         Futures: Higher    Live Equiv:   $224.66 +$0.13*

   Hogs: Lower           Futures: Mixed     Lean Equiv:   $92.76 +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:

   Traders were anticipating higher cash this week and they got more than they
anticipated. Feedlots held out, increasing their asking prices as higher bids
were passed during the morning. Packers finally gave feedlots what they wanted,
which resulted in Southern live cattle $7.00 to $9.00 higher with Northern
dressed cattle $8.00 higher. Price increases such as this are rare but an
indication of the tightness of cattle supplies. With cash trading as high as it
was, it was surprising live cattle futures did not move higher than they did.
Boxed beef prices did not follow the exuberance, closing mixed with choice up
$0.60 while select declined $0.83. Feeder cattle struggled for much of the
morning before spillover trading began lifting futures. Feeder cattle have been
in demand and with live cattle pushing aggressively higher, there was no
holding back. Buyers are confident of higher cattle prices, keeping them paying
more for feeders.
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