DTN Early Word Livestock Comments      01/14 06:17
   Optimism May Push Futures Higher

   Cattle futures found ample support Tuesday, pushing contracts above the
recent sideways trading pattern. There is bullish optimism as beef demand
remains strong. Hog futures were mixed, with the deferred contracts showing
weakness after a consistent period of gains.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher          Futures: Mixed     Live Equiv: $264.05 +$0.25*

   Hogs: Higher            Futures: Mixed     Lean Equiv: $97.62 -$1.30**

   *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 have been trading in a sideways pattern for about a week, but
broke above range Tuesday. This may trigger further technical buying interest.
Packers are in a quandary as their margins are deep in the red, but demand
remains strong. They have not purchased many cattle for deferred delivery and
are reducing slaughter to limit what they need to purchase in an attempt to
improve boxed beef prices. However, boxed beef prices have not been responding
as much as hoped to this point. Prices on Tuesday were mixed, with choice up
$0.88 and select down $0.87. Cash has not traded, and bids and offers have not
been established. Feedlots see no need to be aggressive sellers as they have
been rewarded for heavier cattle. Cash is expected to trade higher this week.