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DTN Early Word Opening Livestock       12/12 08:16
   Lean Hog Markets Looking for Export News Thursday Morning

   With the weekly Export Sales report released Thursday morning, hog traders
will focus on China's involvement in the market over the last week. Cattle
futures are focusing on defending the midweek rally with increased focus moving
toward weekly cash trade, which is yet to develop.

By Rick Kment
DTN Analyst


Cattle: Steady             Futures: Higher   Live Equiv $143.27  -1.42
Hogs:   Steady to higher   Futures: Mixed    Lean Equiv $ 88.16  +0.07

*  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 markets are slowly rolling into the last half of the week with
both sides focused on extending their positions the next couple of weeks.
Feeders still remain aggressive, with asking prices of $121 to $122 per cwt
live in the South and $192 dressed in the North. Given the recent erosion of
beef values and packer margins the last couple of weeks, it is likely that
packers will be willing to let off on the throttle a little through the next
couple of weeks. This could result in steady-to-lower cash cattle prices. The
carrot of tighter supplies during early 2020 still remains strong incentive to
put as much beef in coolers as possible, as packer margins still remain
respectable. But this could change the recent direction of higher cash business
in the upcoming weeks. Futures trade is expected to be limited as
follow-through buyer support is likely to slowly step back into the complex
following the sharp triple-digit rally in feeder cattle trade. The strong
pullback in corn futures Wednesday allowed for increased focus on nearby and
deferred feeder-cattle buying. This underlying support trickled through the
live cattle market, helping to bring life to what had been a sluggish market
affair for most of the week. It is uncertain just how much short-term market
support remains in the complex, as limited interest is expected as the holidays
quickly approach. Thursday slaughter runs are expected at 121,000 head.
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