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DTN Early Word Livestock Comments      05/11 06:26
   Cattle Futures Expected to Extend Gains

   Significantly lower grain prices Monday spurred aggressive buying of cattle
futures. Grain futures are not showing continued follow-through Tuesday. This
may temper further aggressive buying of cattle futures. Hogs have seen lower
prices for the past two days. Tuesday will be key to the extent of the price
correction.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady   Futures: Higher      Live Equiv:    $226.93 +$2.34*

   Hogs: Steady     Futures: Mixed       Lean Equiv:    $119.75 -$0.63**

   * 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 finally found the support they needed from significant pressure on
corn prices Monday. One day of the movement in futures contracts does not
indicate a change in underlying cash, but it does provide some hope feed prices
may become a bit less expensive. With corn prices a bit less expensive, it may
provide feedlots with some ability to hold out for higher cash prices. However,
it has just been one day and it may not translate yet into less expensive grain
from feed suppliers. Grain prices will need to be consistently lower for an
extended period. The upcoming World Agricultural Supply and Demand report and
weather forecasts can change that quickly. There were no cash bids or offers
Monday, but it is expected packers will not bid higher. Boxed beef was very
strong again Monday as demand is on fire. Dressed cattle weights were down 2
pounds last week from the previous week, averaging 828 pounds, but up 8 pounds
from the same week a year ago. The Commitments of Traders report showed funds
as net sellers of 6,030 futures contracts, bringing their net-long positions
down to 48,865 contracts.
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