DTN Early Word Livestock Comments      12/31 06:22
   Mixed Trading Activity Expected Wednesday

   The livestock complex found further support Tuesday despite no cash cattle
trade taking place and limited cash trading of hogs. Both boxed beef and pork
cutouts were lower.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady          Futures: Lower       Live Equiv: $256.31 -$1.14*

   Hogs: Steady            Futures: Lower       Lean Equiv: $99.95 -$1.83**

   *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:

   The chart gaps in feeder cattle futures were closed with the strength on
Tuesday. There are yet further gaps above the market, but it will take a
monumental effort to close those gaps. Live cattle have not closed gaps in the
nearby months despite the strength on Tuesday. It will be up to market
fundamentals to further support the market. Cattle numbers are tight and will
remain that way for an extended period, providing continued support to prices.
The concern is whether the weakness in boxed beef over the past weeks will
continue or if it will run its course and strong demand will resume. Boxed beef
prices on Tuesday were lower with choice down $1.13 at $348.20 and select down
$2.46 at $342.16. It was not that long ago when these prices were about $80.00
higher. Cash cattle have not yet traded this week, with expectations of steady
cash trading. Today is the last trading day for December live cattle. The
February contract will become the front month.