DTN Early Word Livestock Comments      02/04 06:17
   Further Strength Expected in Livestock Markets

   Livestock futures found solid support on Tuesday. Cattle have the potential
to move to close the chart gaps that have remained open since mid-October. Hogs
continue to establish new highs in all but the February contract. Strong
product values continue to provide support.

Robin Schmahl
DTN Contributing Analyst

   Cattle: Higher          Futures: Higher     Live Equiv: $272.57 +$1.73*

   Hogs: Higher             Futures: Mixed     Lean Equiv: $103.15 +$1.67**

   *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 have resumed the uptrend after a short period of choppiness. Higher
cash cattle last week and the expectation for similar gains this week continue
to provide confidence for traders to buy and hold. After all, what is there to
hold this market back? The rhetoric from the government a while back that they
were going to do things to reduce beef prices was just talk. The little that
was implemented had no impact, and there has been no further discussion on it,
as their attention is turned to other things. Beef prices are strong due to
supportive fundamentals, and that will not change much anytime soon. Boxed beef
prices were higher, with choice up $2.50 and select up $2.32. The March feeder
cattle contract is near the chart gap that has remained since mid-October.
There is a strong possibility that the gap will be closed. The other contracts
will follow suit.