DTN Early Word Livestock Comments      12/06 06:14
   Trades Wait for Fundamental Direction

   Live cattle traded in a narrow range Monday as traders were uncertain over
cash trade this week and whether packers may begin to reduce slaughter. Hogs
were in a similar pattern, closing mixed for the day with cutouts taking back
the previous day's gains.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady         Futures: Mixed     Live Equiv:   $181.69 -$4.00*

   Hogs: Higher           Futures: Mixed     Lean Equiv:   $94.38 -$2.48**

   *Based on formula estimating live cattle equivalent of gross packer revenue.
(The Live Cattle Equiv. 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 could not find the support needed to push futures significantly
higher. Nearby contracts could not break to new highs while June and later were
able to make new contract highs as optimism remains. The key will be slaughter
pace. It is anticipated packers may reduce slaughter pace, which could limit
what they will be paying for cattle. So far demand has been good, but the sharp
decline of boxed beef Monday is concerning. Boxed beef had been struggling but
choice falling $6.62 and select down $3.45 was not a good sign. However,
tightening supplies of cattle may keep prices supported even if slaughter pace
decreases. Feeder cattle posted strong gains for the fourth consecutive day,
moving higher due to the weakness of corn.