I believe the letters might be T D, TD pipes are often found, I have a nice example of one, but my letter D is not worn down, but looking at the left side of yours, it does look more like it is a worn down D than a U, I could be wrong, the angle of your photo might change appearance of shapes.
Here is some info on T D clay pipes:
White ball clay pipes
T.D. Pipes: T.D. pipes first appeared ca. 1755, named after pipemaker Thomas Dormer. T.D. pipes became so popular for their design that by the nineteenth century they were "produced by numerous pipemakers in a multitude of variations" (De Vore 1993: 33). T.D. pipes eventually came to stand for a generic style of pipe and not for the pipemaker.