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DTN Early Word Opening Livestock       01/29 06:34
   Traders Search for Stability Midweek

   As the week continues, traders appear to be less in a panic mode than what
drove limit losses in cattle and hog futures early in the week. Even though
there seems to be more thought and perspective in the market early Wednesday
morning, the tone of the market still remains extremely weak.

By Rick Kment
DTN Analyst

Cattle: Steady Futures: Mixed Live Equiv $143.01 +0.08*
Hogs:   Steady Futures: Mixed Lean Equiv $ 80.87 -1.38**

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


   Cash cattle trader remains dead in the water heading into the midweek
session. With the aggressive losses seen in futures trade over the last several
days, the concern that the underlying bearish tone of the market will
significantly affect packers' desire and ability to offer cash values anywhere
near steady money through the end of the week. Although packer and feeder
interest has still remained generally quiet, it is expected that when cattle
are priced, initial asking prices will be higher based on packer's needs to
fill procurement levels during early February. But it may be Thursday or Friday
before bids are seen, and may be a late Friday afternoon affair in getting
cattle sold. Futures trade is expected mixed early Wednesday with live cattle
futures appearing to remain generally oversold given the aggressive losses
Monday and lackluster interest Tuesday while moderate support slowly trickled
into the rest of the complex. The cattle inventory report is due out Friday,
with early expectations of a 1% drop in levels from last January. This could
give an overall firming support to the market, although it is important to
remember that this report focuses more on long-term market direction due to the
gaps between reports. But it still helps to give a good long-term view of the
overall size of the beef herd. Wednesday slaughter runs are expected near
122,000 head.
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