DTN Early Word Livestock Comments      10/31 06:26
   Cash Cattle Trade Significantly Lower

   Cattle futures spent time on both sides of unchanged Thursday, eventually
closing with minor gains. Light cash trade indicates lower prices. Hog futures
continued to struggle as packers remained unaggressive.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower           Futures: Lower      Live Equiv: $274.34 -$1.90*

   Hogs: Lower             Futures: Mixed      Lean Equiv: $106.52 +$0.04*

   *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:

   Friday is the last trading day for the October live cattle contract. Futures
made a large adjustment to the upside Thursday to move in line with cash. The
October feeder cattle contract went off the board down $0.60, adjusting to the
anticipated settlement price. Lower cash trade has already been factored in, as
cash trade showed live cattle trading $4.00 lower and dressed cattle trading
$9.00 lower. This follows the lead of some light trade that took place Monday.
It seems feedlots were hoping for further strength in futures, which could
reduce the decline in cash, but the activity on Thursday did not support that
hope. Packers want to improve margins and will not bid up. Boxed beef prices
closed lower with choice down $3.11 and select down $2.27. This is the first
time this week that both categories closed lower. Feeder cattle in the country
are seeing lower prices at auctions. The sharp decline in futures over the past
week has weakened the cash prices.