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DTN Early Word Opening Livestock       01/22 07:51
   Livestock Complex Searching for Longer Term Direction

   Following general pressure in most livestock trade late Tuesday, traders are
looking for longer-term market direction as indications of steady cash trade
may limit fundamental support in the coming days.

By Rick Kment
DTN Analyst


Cattle: Steady   Futures: Mixed   Live Equiv $144.08 -0.05*
Hogs:   Steady   Futures: Mixed   Lean Equiv $ 83.11 +1.08**

*  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 trade appears to be sluggish to start this week given the short
trading week and general lackluster activity surrounding the cattle complex.
Single-digit moves in all nearby live cattle futures trade gives little
indication of traders' interest in the upcoming days. Asking prices are
expected to become much more evident Wednesday morning, but the overall lack of
packer interest and bids developing at this point could continue to push any
active cash market trade into Thursday, or likely Friday. Futures trade is
expected mixed during the early minutes of trade Wednesday, although there is
expected to be some deviation from the narrow 2- to 3-cent market shifts late
Tuesday as traders try to adjust to current supplies and potential demand
through the upcoming weeks. There is little positive weather premium in cattle
futures as another winter system moves through the Midwest. Although these
storms may not significantly disrupt movement of cattle or plant capacities,
the impact on cattle gains will accumulate over the upcoming weeks. But at this
point, the futures market doesn't seem to care, and will not likely show a
significant price response unless an extreme weather system disrupts a large
portion of cattle country for an extended period of time. Wednesday slaughter
runs are expected near 121,000 head.
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