DTN Early Word Livestock Comments      06/05 06:15
   Uncertainty Will Dominate Trading Activity

   The volatility in cattle futures was exceptional as the market initially
reacted negatively to the news, but then reversed quickly on a sell-the-rumor,
buy-the-fact scenario. Hog futures did not see any spillover trading, but
followed their own fundamentals.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady         Futures: Higher       Live Equiv: $289.67 -$1.88*

   Hogs: Lower            Futures: Higher      Lean Equiv: $104.77 -$0.38**

   *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:

   It was an incredible day in the cattle complex as futures opened lower in
reaction to the confirmation of the New World screwworm being discovered in
Texas. That quickly reversed until feeder cattle futures moved to limit up for
the final hour of trading. It did not take long for the market to utilize the
expanded trading limits implemented on Monday. Feeder cattle closing limit up
results in expanded trading limits today. Feeder cattle futures have a limit of
$16.00, and live cattle have a limit of $12.75. I doubt the market will utilize
the expanded limits, but anything is possible. There may be follow-through
buying as traders were unable to liquidate short positions once feeder cattle
futures were locked limit up. It was a classic sell-the-rumor, buy-the-fact
scenario. Cash cattle trade showed the bulk of activity at steady cash with
last week. Boxed beef prices were lower, with choice down $3.20 and select down
$1.39.