DTN Early Word Livestock Comments      12/05 06:14
   Southern Cattle Expected to Trade Higher

   It was another good day in the cattle complex, and rightly so, with cash
trading substantially higher. Packers were short-bought and needed to purchase
cattle. Hog futures found buying interest to add to the strength of Wednesday.
Cash hogs traded higher, providing support.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher         Futures: Mixed        Live Equiv: $264.80 -$1.16*

   Hogs: Lower            Futures: Mixed        Lean Equiv: $99.47 -$0.69**

   *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:

   It was another good day for cattle futures. Traders have been confident that
cash cattle would trade higher, and that is what finally took place. Packers
had to step up to purchase cattle as they were short-bought and paid $11.00 to
$16.00 more in Nebraska than last week. There has been no cash trading activity
in Southern live cattle so far, but it will take place today. Feedlots will
hold for higher prices due to the higher cash trade and strong futures this
week. Boxed beef prices have been lower this week, but that may not have an
impact on what packers will need to pay to obtain the cattle they need. Choice
boxed beef was down $1.09, with select down $2.80. Packer margins have reached
the highest level they have been this year, but that may come to an end
throughout the rest of this month. Cattle futures may not push much higher
today, as futures may have higher cash already factored in.