DTN Early Word Livestock Comments      01/06 06:10
   Traders Are Bullish on Cattle

   Cattle futures extended their gains with continued optimism over tight
cattle supplies and renewed demand for beef. Hogs did an about-face, resuming
the uptrend with new contract highs.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher          Futures: Mixed       Live Equiv: $260.80 +$2.82*

   Hogs: Higher            Futures: Mixed       Lean Equiv: $99.66 -$0.73**

   *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 added to the recent gains as the price rebound continues. The
February live cattle contract struggled, closing slightly lower as it has
already priced in an increase in cash. There seems to be renewed consumer
interest in beef. This has provided strength to boxed beef prices. Boxed beef
on Monday showed choice up $3.73 and select up $4.58. Traders are optimistic
that packers will need to step up to purchase cattle aggressively, resulting in
higher prices. Feeder cattle futures led the charge on the recent developments
of the New World screwworm (NWS) being found within the buffer zone in Mexico,
indicating that the potential for the border reopening will not happen anytime
soon. The May and later feeder cattle contracts gapped open on Monday, with
those gaps remaining at the close. The Commitment of Traders report showed fund
traders reducing their net-long live cattle futures position by 1,100 contracts
to 92,214. They increased their net-long positions in feeder cattle futures
contracts to 15,829.