DTN Early Word Livestock Comments      12/12 06:07
   Strong Cash Should Support Livestock Futures

   Cattle futures showed significant support as cash cattle traded higher with
similar gains as last week. Hog futures showed strong gains in contracts
through August on higher cash and cutouts.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher          Futures: Mixed       Live Equiv: $261.35 -$0.90*

   Hogs: Lower             Futures: Higher      Lean Equiv: $104.98 +$1.57**

   *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 gapped open to move closer to the price gaps that were left
from Oct. 27. Now there is a gap above and one below. Both of these will likely
be filled in the near term as volatility will remain prevalent. Cattle futures
have regained much of what has been lost since President Trump indicated the
government was going to do something about high beef prices. This demonstrates
that the market is operating on fundamentals, as it should. A tight supply and
good demand will support higher prices. Packers were aggressive on Thursday,
with Southern live cattle trading $6.00 higher and Northern dressed trading
$12.00 higher. This has set the stage for higher cash trade across the regions.
However, despite the high cash trade last week and this week, concerns persist
about the continued weakness of boxed beef prices. On Thursday, choice boxed
beef declined $1.25, with select down $1.42.