DTN Early Word Livestock Comments      05/06 06:11
   The Sharp Decline in Crude Oil May Support Livestock Futures

   Livestock futures rebounded. Cattle futures recovered some of their recent
losses as some of the news circulating about the government looking into the
beef industry has now been factored in. Hogs rebounded just on buying due to
bottom picking.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Mixed      Live Equiv: $290.91 +$0.74*

   Hogs: Steady            Futures: Higher    Lean Equiv: $102.29 -$1.39**

   *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 rebounded after there was no apparent reason for the recent
weakness experienced. Beef prices continue to hold, and the drought that is
affecting cattle country may hinder any potential to rebuild the beef herd in
those areas. Anything that the government has done to bring beef prices down so
far has not worked, as the high prices are a result of a reduced beef herd.
Much of the increase in beef cattle numbers has been the result of an
increasing dairy herd, adding beef-on-dairy calves into the feedlots. Of
course, this is reducing the milk price as more dairy cows produce more milk.
Some feedlots have developed relationships with dairy farms to purchase their
calves, as it provides a steady supply of animals for the feedlots and dairy
farms calve throughout the year. Boxed beef prices were higher, with choice up
$0.78 and select up $1.64.