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DTN Early Word Opening Livestock       03/30 06:36
   Livestock Markets Struggle to Find Renewed Buyer Support

   Limit losses through the end of the week in all nearby livestock trade is
opening the door for additional early morning pressure as concerns of expanding
COVID-19 cases through the country add uncertainty about short- and long-term
meat demand.

By Rick Kment
DTN Analyst



Cattle: Steady   Futures: Lower   Live Equiv $164.81 -0.23*
Hogs:   Steady   Futures: Lower   Lean Equiv $ 78.68 -3.78**

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

GENERAL COMMENTS:

   The wild surge in cash cattle prices last week is expected to create a sense
of hope that renewed interest will quickly move back into the complex. The tone
of cash cattle markets last week were set before the strong pullback in futures
trade. With markets well off long-term lows set during the middle of March, the
focus on rebuilding long-term support and a continued need to keep packer lines
active in order to meet current demand is expected to keep feedlot managers
optimistic through the first few days of the week. Bids are unlikely on Monday
with the focus on inventory and showlist distribution the main priority through
most of the day Monday. The general tone of the cash market last week posted
live prices in the South gaining $9 to $10 per cwt, while dressed business in
the North was mostly $17 per cwt higher. The limit losses at the end of the
week not only heavily impacted cattle trade, but quickly sent a message through
all livestock futures that unchecked gains from the previous week would not
last. Even though it is likely that support levels set during the middle of the
month are not in danger, there are growing concerns that overall meat demand
may not continue at the aggressive pace in March when retailers were scrambling
to keep product on shelves. The expansion of coronavirus cases in the U.S. over
the weekend has been incredible, creating even more concern that this will
heavily impact consumer activity over the long term, not to mention the food
service industry, which has essentially been brought to its knees through the
virus pandemic. Expanded trading limits are available in all cattle markets
with live cattle once again able to move $4.50 per cwt in either direction
before markets are halted, while feeder cattle futures are limited to a $6.75
per cwt market move. The potential of firm buying support in outside markets
could quickly cause moderate short-covering to move back into the cattle
complex through morning Monday, but this support could be slow to develop.
Monday slaughter is expected at 121,000 head.
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