DTN Early Word Livestock Comments      05/20 06:20
   Hogs May Develop Greater Support

   Traders supported the live cattle complex Monday but did not generate much
interest in feeder cattle. The rebound in cattle may be tempered this week,
looking ahead to the cash trade. Hogs exhibited spread trading based on the
weakness of cash on Friday. However, that may be reversed with the strength of
cash from Monday.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady         Futures: Mixed       Live Equiv: $259.15 +$1.51*

   Hogs: Higher           Futures: Higher      Lean Equiv: $106.91 +$0.97**

   *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:

   Live cattle futures closed higher Monday as there was interest in buying the
break. Strong cattle market fundamentals increase the interest in long-term
ownership of futures contracts. However, if prices remained at the current
levels for an extended time, it would be incredible. Cattle prices do not need
to continue higher to maintain profitability. Stability will accomplish a
similar purpose. Boxed beef prices were higher on Monday, with choice up $2.32
and select up $1.72. Traders have two things to consider for the rest of this
week. One is that the Cattle on Feed report will be released Friday. The other
is that packers have been aggressively purchasing cattle for deferred delivery.
Of the cattle purchases last week, 40% of those were for later delivery,
reducing the need for the packers to be aggressive.