DTN Early Word Livestock Comments      12/03 06:09
   Cattle Futures May See Limited Upside Potential

   Cattle futures had another wild day with strong gains after a higher
opening. Futures increased on trader perception and technical buying. Hog
futures continued their weakness as more of last week's gains were eliminated.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Lower          Futures: Lower        Live Equiv: $265.92 -$3.56*

   Hogs: Higher           Futures: Mixed        Lean Equiv: $100.36 -$0.57**

   *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 rallied on their own accord and not a reaction to bullish
news. The weakness of Monday was reversed as the perception of traders turned
positive. There seemed to have been a change in perception that packers could
be more aggressive this week, and cash might trade higher. It is still too
early to assess cash trade, but market strength would lend itself to that idea.
However, boxed beef prices suffered a substantial loss, with choice down $4.17
and select down $7.10. This eliminated the gains on Monday and then some. This
may indicate that the weakness in boxed beef may continue. The action on
Tuesday may have been traders moving the market more closely in line with cash.