DTN Closing Livestock Comment 02/02 15:55
   Cattle Prices Surge Monday

   Sharp gains quickly developed Monday morning in all cattle futures contracts
as trade had the entire weekend to review and analyze last Friday's Cattle
Inventory Report. This sparked sharp triple-digit gains in live cattle and
feeder cattle contracts.

Rick Kment
DTN Analyst

GENERAL COMMENTS:

   Cattle futures surged higher at the opening bell Monday morning and
maintained active gains through the entire trading session. Although live
cattle futures closed well below daily highs, the ability to sustain the $2 per
cwt market rally early in the week is still considered a major win. Last
Friday's Cattle Inventory report was the main spark to the renewed buyer
support. This report posted that overall cattle numbers were below year-ago
levels, and beef cow numbers were 1% below year-ago levels. Calves born last
year fell 2% from the year previous. This bullish report was encouraging for
the market. But at the same time, we really don't know much more about the
overall scope of the market support. Even without specific numbers, it was not
unknown in the industry that cattle supplies have tightened, which has led to
current price levels. The challenge in maintaining the most recent market gain
is understanding how demand will react to the current supply shortages, and
what will happen in the overall beef market over the next two years, when it
comes to rebuilding or sustaining the current herd. Hog prices closed lower on
the Daily Direct Afternoon hog report, down $1.35 with a weighted average of
$82.22 on 715 hogs. March corn closed down 2 1/2 at $4.258 and March soybean
meal closed up $0.90 at $294.5. The Dow Jones Industrial Average is up 515.19
at 49,407.66.