DTN Early Word Livestock Comments 12/07 06:54

DTN Early Word Livestock Comments      12/07 06:54
   Traders Uncertain of Price Support

   Cattle futures completely fell apart Wednesday. Support remains elusive and
any increase is now viewed as a selling opportunity. Hogs held well with prices
mixed into the close. Lower cutouts may influence trade Thursday.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower         Futures: Higher    Live Equiv:   $210.51 -$1.38*

   Hogs: Lower          Futures: Lower     Lean Equiv:  $  90.65 -$1.47**

   *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:

   Cattle futures posted a large decline as the end of Wednesday's trading drew
near. Bullish traders seem to just throw in the towel, resulting in live cattle
futures moving to the lowest level since January with feeder cattle again
falling to new contract lows. Buyers are being run over anytime they step in
and bottom pick the market. A technically oversold market is meaningless in
this environment. Not much help came from cash or boxed beef. Cash cattle
continued to trade at $3 lower in the South and $4.00 lower in the North. The
market now has a steeper discount to cash, which shows an unfriendly market
sentiment. Boxed beef prices were mixed with choice down $3.19 while select
gained $0.77.