DTN Early Word Livestock Comments      06/23 06:12
   Cattle Futures Should Find Continued Support

   Cattle futures opened higher in reaction to the Cattle on Feed report, but
did not hold the initial gains. Feeder cattle futures performed well, but
closed well off their highs. Hog futures could not hold but maintained the
sideways trading pattern.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Higher      Live Equiv: $289.82 +$1.63*

   Hogs: Higher            Futures: Mixed      Lean Equiv: $102.67 -$0.69**

   *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:

   The higher cash cattle trade last week was not enough to move cattle futures
to new highs. There was an expected reaction to the Cattle on Feed report, but
futures could not hold the early highs of the day. The question now is whether
futures can retest and break through contract highs. The current fundamentals
would suggest that it will be the case. However, will demand continue to
support the market? With fuel prices declining, there is good potential that
demand will remain strong despite high beef prices. Boxed beef closed higher on
Monday, with choice up $1.69 and select up $3.51. Feeder cattle continue to see
strong demand at auctions, with premiums being paid in some cases. The
Commitment of Traders report showed fund traders adding 13,733 long positions
in live cattle, bringing their net long to 122,805 contracts. They added 1,964
long positions to feeder cattle, bringing their net long to 13,356.