DTN Early Word Livestock Comments      01/16 06:17
   Higher Cash Cattle Trade Expected

   Livestock futures showed gains in all contracts Thursday. Feeder cattle led
the charge in the cattle complex. Cash cattle have not traded as packers hold
out for a miracle to avoid having to pay more for cattle. Hog futures are well
on their way with new contract highs in all but the nearby February.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher         Futures: Mixed     Live Equiv: $265.97 +$1.54*

   Hogs: Lower            Futures: Higher    Lean Equiv: $99.42 +$2.31**

   *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 traders are optimistic about higher prices resulting in the
resumption of the uptrend. Technical traders now have the chart gaps and
contract highs in their sights. If higher cash trade develops as expected and
boxed beef prices find further support, traders will continue to add to their
long positions. Packers have been holding out in the hopes something might
impact the market, allowing them to avoid paying higher cash this week. If the
New World screwworm crosses the border, there could be a bearish reaction.
However, in the broader context, it may not have a long-term bearish impact.
For now, it remains bullish as cattle are not imported from Mexico. However, it
may not be a matter of if, but when, a case of the screwworm will be found in
the U.S. Boxed beef prices on Thursday were higher, with choice up $2.24 and
select up $2.06.