DTN Early Word Livestock Comments      06/30 06:13
   Cattle Futures May Have Difficulty Moving Higher

   Traders were waiting for something bullish to develop in the market to
provide a reason to buy futures. There was no specific trigger to boost the
strength on Friday, but futures jumped significantly. Hogs showed mixed trade
with no specific fundamental direction to close the week.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Lower         Live Equiv: $288.28 +$1.38*

   Hogs: Higher           Futures: Mixed         Lean Equiv: $123.39 -$2.12**

   *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:

   Traders turned aggressive in the cattle market Friday with futures contracts
posting impressive gains. The support did not come from cash trade as most
activity took place in both the Northern dressed and Southern live markets
$4.00 to $5.00 lower for the second consecutive week. The strength seemed to
stem from the strength in the equity markets moving to record highs, and some
trade agreements made between the U.S. and China. These agreements were not
specific to commodities, but any agreements with China seem to provide support
to markets. A strike at the Tyson packing plant in Amarillo has begun. The
employee union hadn't authorized the strike until before Friday's trade, which
made it somewhat surprising the markets exploded higher as much as they did;
but given the discount they currently carry to cash, the funds seem reluctant
to press the markets lower. The June live cattle contract ceased trading Monday
with August taking over as the lead month. The Commitments of Traders report
showed fund traders as net sellers of 2,752 contracts in live cattle, reducing
their long positions to 127,553 contracts. The funds backed off their
record-long positions in feeder cattle by 324 contracts, reducing their
net-long position to 34,269 contracts.