DTN Early Word Livestock Comments      05/18 06:09
   China Renews Suspended Export Licenses for US Beef Plants

   Live cattle closed higher on the week, but were not able to move to new
contract highs despite strong cash developing. Hog futures closed the week
holding just above support as supportive fundamentals remain elusive.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Higher      Live Equiv: $289.34 +$0.93*

   Hogs: Lower             Futures: Higher      Lean Equiv: $104.01 +$1.04*

   *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:

   Cash cattle traded substantially higher for the week, with Northern dressed
cattle $7.00 to $12.00 higher, while Southern live cattle were $3.00 to $5.00
higher. The past two weeks have shown incredible gains in the cash market. This
moves packers' margins further in the red. Boxed beef prices on Friday showed
choice up $1.80 and select up $0.25. Packers are having a difficult time
finding sufficient cattle for slaughter and to purchase for deferred delivery.
China renewed export licenses for 425 U.S. beef plants that had been suspended
for more than a year and added another new 77 plants last Thursday, but they
were suspended again over the following 12 hours, creating confusion. However,
that is being reversed again, and indeed the renewed licenses are granted.
Ironically, beef supplies in the U.S. are very tight, yet more opportunities
are opening up for beef exports. How much will be exported when supplies are
tight and prices are high? The Commitment of Traders report showed fund traders
as net sellers of 9,064 live cattle futures, reducing their long positions to
128,954. They were net sellers of 2,612 futures in feeder cattle, reducing
their long positions to 17,909.