DTN Early Word Livestock Comments      07/01 05:26
   Cattle Futures May Have Difficulty Moving Higher

   Live cattle closed moderately higher in nearby contracts Monday, while
deferred contracts showed strong gains along with feeder cattle. Traders seemed
confident to buy back into the market after it corrected from being overbought.
Hog futures took it on the chin with the greatest pressure exhibited on the
nearby contracts.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Lower         Live Equiv: $288.30 +$0.02*

   Hogs: Higher           Futures: Mixed         Lean Equiv: $121.30 -$2.09**

   *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 futures followed through on the strength of Friday despite the lower
cash trade last week. The June contract ceased trading on Monday, with August
taking over as the lead-month and carrying a significant discount to cash.
Traders are being cautious due to the recent weakness of cash cattle trade and
the potential for reduced beef demand as the summer progresses. However,
fundamentals remain bullish and should keep support in the market. Boxed beef
prices were mixed with choice down $0.93 and select up $1.17. It is a
holiday-shortened week, which should result in cash cattle trade taking place
earlier. Imports of cattle, bison, and horses from Mexico will resume as of
July 7, starting with the port in Douglas, Arizona. Other ports of entry will
be phased in over the next 1 1/2 months. Imports were stopped on May 11 due to
the threat of the New World screwworm.