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DTN Early Word Opening Livestock       01/23 06:33
   Lean Hog Futures Attempt to Regain Recent Losses

   The bounce higher in lean hog futures comes with limited new fundamental
market information available to the complex. Continued moves higher in nearby
lean hog trade Thursday will look for further market support.

By Rick Kment
DTN Analyst


Cattle: Steady   Futures: Mixed    Live Equiv $143.88 -0.20*
Hogs:   Steady   Futures: Higher   Lean Equiv $ 83.66 +0.55**

*  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 activity broke lose Wednesday afternoon with light-to-moderate
trade developing in the South. Trade ranges were wide, from $119 to $124 per
cwt, although most trade developed at $124 per cwt, which is fully steady with
last week's prices. The stability in the market will go a long way in helping
create further market support through the end of the week and likely the rest
of January. Although a few cattle traded in the North, it is too early to
determine where price levels will fall or call a market trend due to the
limited activity. More interest is expected in the next two days, but it would
not be surprising if some trade does not develop until after the Cattle on Feed
report is released Friday afternoon. Early expectations are that total on feed
numbers will shift higher 1% to 2% with the average estimate 2.2% higher than
year-ago levels. Estimated December cattle placements are expected to be 3.2%
above year-ago levels, while December cattle marketing is pegged at a 5.2%
increase from 2018 levels. The continued lack of support in live cattle and
feeder cattle futures is creating lackluster interest in the complex. This may
add increased uncertainty, although there is limited expectation of strong
follow-through pressure developing in live cattle trade over the near future.
Feeder cattle futures on the other hand, have continued to weaken as traders
near support levels, so there is the potential for increased softness to
develop through the end of the week. Thursday slaughter runs are expected near
122,000 head.
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