DTN Early Word Livestock Comments      12/17 06:17
   Optimism Over Higher Cash Cattle Fades

   Cattle futures closed higher on Tuesday with feeder cattle far outpacing
live cattle. Technical traders may be gunning to close the chart gaps. Hog
futures found support with contracts closing at a new high in the uptrend as
traders remain confident over stronger prices.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower          Futures: Mixed       Live Equiv: $263.63 +$0.81*

   Hogs: Lower           Futures: Higher      Lean Equiv: $104.38 -$0.33**

   *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:

   Live cattle futures closed with minor gains, supported by lower numbers but
marred by uncertainty over the cash trade. The earlier feeling of the potential
for a higher cash cattle trade this week has given way to the potential for
weakness. Packers have been able to purchase a significant amount of cattle for
deferred delivery, which may limit their purchases through the holidays. Boxed
beef prices were mixed, indicating demand may have stabilized for the time
being. Choice boxed beef was down $0.58, with select up $1.80. Livestock
futures have yet to find sufficient strength to move into and close the chart
gaps. The bottom of the gap may be a strong resistance area that may be
difficult to penetrate in the near term. The weather over the next week will
not be conducive to feedlot performance and may hinder the desire to purchase
cattle.