DTN Early Word Livestock Comments      12/04 06:16
   Cattle Futures May Trade Sideways Wednesday

   Cattle futures reversed on Tuesday, taking back most -- if not all -- of the
losses from Monday. Feedlots will be looking for higher cash prices this week
with traders thinking cash will be steady at worst. Hog futures closed mixed
Tuesday as traders were uncertain over the ability of futures to find continued
underlying support.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady        Futures: Mixed       Live Equiv: $223.01 -$1.43*

   Hogs: Lower          Futures: Mixed       Lean Equiv: $95.56 -$3.05**

   *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:

   Cattle futures found buying interest on the break Tuesday. This support did
not stem from strong boxed beef, but from the anticipation that cash may trade
no worse than steady this week. Feedlots were able to hold for higher prices
last week and have their sights set on higher prices this week. They may be
willing to hold cattle longer if packers do not pay higher prices. The problem
is packers had purchased some cattle ahead, slaughter continued at a reduced
pace, and boxed beef prices fell Tuesday. Choice fell $3.68 with select down
$1.67. Traders bought the break in anticipation of continued tight cattle
supplies as there is little indication of rebuilding the cattle herd.