DTN Early Word Livestock Comments      10/27 06:06
   Cattle Strength in Deferred Contracts

   Feeder cattle were supported Monday from low placements, especially in the
deferred contracts, indicating that long-term support is to be expected. Beef
cutouts jumped higher Monday.

Robin Schmahl
DTN Contributing Analyst

                        Futures     Equiv
Cattle:     Higher      Higher      Live       $273.23     +$2.81 *
Hogs:       Lower       Steady      Lean        $80.57     -$0.29 **

   *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:

   The market expected cattle futures to be a little more exciting than the
trade actually was on Monday after a bullish Cattle on Feed report. Feeder
cattle saw the biggest impact with the deferred months rallying faster than the
nearby months. Traders were bear spreading futures given the lower placements.
Cash trade last week was stronger for live cattle, with an average price paid
more than $3 higher than the week before even with the lack of trade that took
place. Packers were patient last week with only 40,128 traded versus 90,762 the
week before, but they will need to step back into the market this week.