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DTN Early Word Opening Livestock       12/11 06:22
   Cattle Futures Establishing Pre-Holiday Range

   Limited activity in cattle trade appears to be gearing up for a range-bound
market structure through the end of the year. Strong hog market gains put more
emphasis on trade talks, although no schedule has yet been announced.

By Rick Kment
DTN Analyst


Cattle: Steady to higher   Futures: Mixed   Live Equiv $144.69 -0.96*
Hogs:   Steady to higher   Futures: Higher  Lean Equiv $ 88.09 +1.14**

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

GENERAL COMMENTS:

   Cash cattle traders are inching closer to getting business done Wednesday
morning with limited asking prices and bids available by the end of Tuesday.
Cattle are priced in the South at $121 to $122 per cwt with bids slowly
developing at $118 per cwt. Limited interest is yet seen in the North, although
both sides appear not to be in any significant hurry and trade may not develop
until sometime Thursday or Friday. Given the stability and narrow shifts in
futures trade, and continued pressure in beef values, it may be a challenge for
feedlot managers to demand much more than steady to firm once the dust settles
at the end of the week. The erosion in boxed beef values seems to have
triggered only limited concerns in futures trade as traders continue to focus
on the still strong beef values as compared to where prices have held through
most of the fall. But traders will be looking for a sense of stability over the
coming days in order to break away from the wholesale beef price freefall
through the end of the year. Futures trade is likely to remain mixed again in a
narrow to moderate range early Wednesday morning. With very limited long-term
direction expected over the next couple of weeks, traders appear to be settling
into a narrow to moderate holiday range, which may bring some additional
stability to the complex through the end of the year. Wednesday slaughter runs
are expected at 122,000 head.
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