DTN Early Word Livestock Comments      10/09 06:14
   Cattle Futures May Have Higher Cash Factored In

   Livestock futures extended gains Tuesday with cattle and hogs setting new
highs for the move. Traders continue to support the markets as fundamentals are
positive and the trend is up.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher        Futures: Mixed       Live Equiv: $223.92 +$0.29*

   Hogs: Higher         Futures: Higher     Lean Equiv: $100.81 -$1.24**

   *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:

   Boxed beef prices were mixed Tuesday with choice up $1.09 and select down
$0.18. That was not enough to set a negative tone in the market as the recent
strength indicates strong demand for beef. The packers may not slow the
slaughter pace further as they need to supply beef to the market. Feedlots will
hold out for higher prices this week as they know the packers did not purchase
many for deferred delivery. Higher futures prices also provide confidence to
feedlots that higher cash can be achieved. Cash trade is likely to be pushed to
the end of the week  Lower feed prices allow the feedlots to hold for higher
prices and hold for the following week if necessary. Cattle numbers remain
tight and will remain that way for some time.