DTN Early Word Livestock Comments      07/02 06:13
   Cattle Futures May Rebound

   Traders were quick to react Tuesday to the announcement that imports of
cattle from Mexico will resume next week. The pressure was a psychological
reaction and not a fundamental change. Hog futures posted another day of lower
highs and lower lows, keeping the recent downtrend intact.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower          Futures: Mixed         Live Equiv: $287.47 -$0.83*

   Hogs: Higher           Futures: Mixed         Lean Equiv: $118.23 -$3.07**

   *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 were substantially lower right out of the gate Tuesday as
traders reacted to the news that imports of livestock from Mexico will resume.
This was a psychological reaction to news that traders did not like. The volume
of cattle imported is not large and should not impact supplies to any
significant degree unless beef demand slows. Lower overall cattle supplies and
strong beef demand should continue to support prices. However, this is an
indication of what the market will do if there is a significant fundamental
change or bearish event. Higher prices will not last forever. Cash cattle have
not yet traded, but it is expected to take place Wednesday. Boxed beef prices
were mixed with choice up $0.04 and select down $4.04.