DTN Early Word Livestock Comments      05/15 06:12
   CME to Raise Trading Limits

   Cash cattle traded higher on Thursday, but that had a limited impact on
futures. Futures opened higher and traded higher for a time before selling
pressure gained the upper hand. Hog futures fell back in contracts through the
end of this year, continuing the pattern of one day up and one day down.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher          Futures: Mixed      Live Equiv: $288.41 +$0.16*

   Hogs: Higher             Futures: Higher    Lean Equiv: $102.97 +$0.52*

   *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 was not disappointed in cash trade on Thursday, with Northern
dressed sales ranging from $2.00 to $7.00 higher. There were a few sales that
took place as much as $15.00 higher. Southern cattle sales were $3.00 to $5.00
higher. Surprisingly, this did not provide further support to cattle futures.
Sure, boxed beef prices were mixed, with choice down $1.32 and select up $0.42,
but that did not offset the bullishness of cash. Weekly export sales were below
the previous week at only 7,500 metric tons (mt), but even that did not offset
the bullishness of cash. There may be concern that once Memorial Day demand is
finished, beef demand may slow. Another concern is the greater volatility that
has developed. This may be enhanced by the CME Group expanding trading limits
beginning June 1. Feeder cattle limits move from $9.25 to $10.75 with expanded
limits from the current $13.75 to $16.00. Live cattle limits move from $7.25 to
$8.50, with expanded limits from the current $10.75 to $12.75.