DTN Early Word Livestock Comments      05/07 06:09
   Early Cash Cattle Trade May Indicate Steady to Higher Prices

   Cattle futures struggled during the day but posted higher closes in all
contracts except May feeder cattle Tuesday. New contract highs were again
established. Hogs showed a divergence in price with significant pressure on the
nearby months, with later contracts holding. Strong cash may provide support.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher         Futures: Higher      Live Equiv: $252.61 +$1.58*

   Hogs: Higher          Futures: Higher     Lean Equiv: $101.25 -$0.96**

   *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:

   Cattle continue to establish new highs across the board at levels never seen
before. The August feeder cattle contract stopped just shy of $300 on Tuesday,
moving to $299.90 before slipping back. Either $300 will be a price resistance
or a target level to exceed by technical traders. There may be many sell orders
at that level, which could trigger some liquidation as the market is
overbought, and that price could be psychological resistance. A few cash cattle
were traded Tuesday, as packers may be more aggressive in purchasing cattle
this week. A few trades were recorded at steady to $2.00 higher. This may
indicate cash sales could be no less than steady this week. Boxed beef prices
were higher, with choice up $1.10 and select up $4.90.