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DTN Early Word Opening Livestock       12/10 06:37
   Sluggish Early Trade Points Toward Mixed Trade Tuesday

   Limited new direction is expected early Tuesday morning with the weaker
undertone remaining across hog futures, while cattle trade is expected mixed in
a narrow range.

By Rick Kment
DTN Analyst

Cattle: Steady             Futures: Mixed   Live Equiv $145.65 -0.55*
Hogs:   Steady to higher   Futures: Mixed   Lean Equiv $ 86.95 -0.10**

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


   Despite the Christmas holiday just a couple of weeks away, cash cattle
markets are following the weekly script with limited interest likely to develop
early in the week. Packers continue to focus on increased overall cattle moving
through the system following the higher cash cattle markets last week. Feedlot
managers are likely to remain even more aggressive when cattle are priced the
next couple of weeks in order to take advantage of the positive cash market
momentum of the last several weeks. Both sides are abundantly aware of tighter
supplies just around the corner, which gives packers incentive to put as much
beef away at current or slightly higher cash prices as possible despite the
eroding beef values. Cash cattle bids are not likely until midweek or later
with a late week trade event likely at this point. Futures are expected mixed
with traders potentially remaining a little too comfortable with the current
trading range heading into the holiday season. With Christmas and New Year's
holidays landing in the middle of the week, it is uncertain just how this will
affect not only trade volume but overall market mentality through the end of
the year. When holidays are in the beginning or end of the week, a "long
weekend" is typical, but markets seem to be more disruptive during midweek
holidays, with limited scattered trade throughout the week, rather than a
couple of days. Cattle market direction still remains split between short- and
long-term direction with nearby futures still concerned about current
availability of market-ready cattle, while increased premium is being placed in
the spring and summer contracts based on potential tighter supplies. Most of
the supply tightness is expected to be limited to the first quarter, but
current packing capacity could keep packers aggressive through the first half
of the year, depending on demand support during early 2020. Tuesday slaughter
runs are expected at 120,000 head.
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