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DTN Early Word Opening Livestock       12/09 06:44
   Mixed Trade Expected as Traders Look for Longer-Term Direction

   Firm gains in cash cattle trade late last week is expected to put increased
focus on follow-through support as traders head toward the holiday season.
Limited early trade is likely Monday morning as traders balance fundamental
support with outside market moves.

By Rick Kment
DTN Analyst

Cattle: Steady             Futures: Mixed   Live Equiv $146.20 -0.60*
Hogs:   Steady to higher   Futures: Mixed   Lean Equiv $ 87.05 +0.72**

*  based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue


   Cash cattle trade is expected to return to a normal Monday routine of
showlist distribution and inventory-taking following last week's cash cattle
trade on Thursday and Friday. The underling firmness in the cash cattle market
pushed Southern live cattle prices to $119 to $119.50 per cwt, mostly $119 per
cwt and a $1 per cwt gain from the previous week. Northern trade didn't fully
develop until Friday with trade mostly $188 on a dressed basis with a full
range of $187 to $190 per cwt. The trend is $1 per cwt higher than the previous
week and is expected to spark increased bullishness from feedlot managers when
pricing cattle through the week. There are only two full weeks of trade left in
the year before moving into the holiday-shortened trading schedules, which
means that both sides will be planning ahead in order to get numbers in order
for month end. Futures trade is expected to remain mixed early Monday morning,
although the late week firmness in live cattle and feeder cattle trade has
helped to offset any growing concern of a major correction during early
December. Continued pressure in boxed beef values last week has added some
uncertainty to the complex, both limiting plant margins and raising questions
about the ability to continue to move beef at current price levels through the
end of the year. But trades continue to focus on supply tightness over the
upcoming months, and so far, have been unwilling to back away from the bullish
market undertone as live cattle futures remain in a narrow trading range,
unwilling to move too far away from recent contract highs. Monday slaughter
runs are expected at 121,000 head.
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