DTN Early Word Livestock Comments      12/09 06:29
   Fund Traders Hold a Record-Long Hog Futures Position

   Cattle futures closed mostly higher Friday but lacked the strength
anticipated as cash cattle were higher. Futures retained a discount as traders
remained cautious. Hog futures were higher Friday despite lower cash. Packers
are expected to be more aggressive this week.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Steady        Futures: Mixed       Live Equiv: $224.15 +$2.00*

   Hogs: Higher         Futures: Lower       Lean Equiv: $97.02 +$2.43**

   *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:

   Even though cash cattle traded higher last week, live and feeder cattle
futures closed lower for the week. Northern dressed cattle traded $2.00 higher
with Southern live cattle trading steady to $2.00 higher. Traders did not get
too excited over the higher cash but remained cautious over the upside price
potential. Boxed beef prices were mixed with choice up $4.20 and down select
down $0.37. Packers will try their best to improve margins and may continue to
slow the slaughter pace to accomplish that task. Cattle imports from Mexico
remain restricted, which may continue to provide support as long as that
remains in place. It is uncertain how many cattle packers have purchased for
deferred delivery but one major packer had already purchased some cattle for
delivery during the last week of December. The fund traders added 5,528 long
futures positions in live cattle over the week ended Dec. 3, increasing their
net-long positions to 123,878 contracts. They added 2,054 futures positions
bringing their net-long position in feeder cattle to 17,521.