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DTN Early Word Opening Livestock       01/24 06:23
   Cattle Traders Look For Direction From Cattle on Feed Report

   Early morning trade is expected to try to bring some stability to the recent
pressure seen in all cattle markets Thursday. The aggressiveness of the losses
was surprising as traders focused on growing market uncertainty through the
upcoming weeks.

By Rick Kment
DTN Analyst


Cattle: Steady Futures: Mixed Live Equiv $143.83 -0.05*
Hogs:   Steady Futures: Higher Lean Equiv $83.76 +0.10**

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

GENERAL COMMENTS:

   Following cash cattle trade that developed over the last two days, the
lion's share of needed cattle sales appear to be already in the books. This is
somewhat unusual during a "cattle on feed report week" as typically both sides
are more focused on the direction of cattle inventory levels and placements
before becoming moderately aggressive. The current tight supplies of cattle
available and need for packers to secure cattle numbers for the upcoming weeks
sparked early trade. But steady money at best with last week was all that could
be seen as trade in the South continued at $124 per cwt live basis. Dressed
trade in Nebraska held out until Thursday afternoon with prices at $198 to $199
per cwt, generally steady to $1 lower than last week. When all the dust clears,
it is expected that cattle markets will remain steady for the week, which
creates concerns that the much anticipated tight supplies of cattle through the
first quarter of the year have been unable to show any significant support
during January. Futures trade is expected weak early Friday morning as traders
still remain concerned about the aggressive triple-digit losses that flooded
the market Thursday. This will likely bring about a combination of follow
through end of the week selling pressure and late week short covering, which
may lead to moderate to wide shifts in trade as traders look for additional
direction from the cattle on feed report Friday afternoon. Friday slaughter
runs are expected near 121,000 head.
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