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DTN Early Word Opening Livestock       04/01 06:29
   Market Uncertainty Expected as April Arrives

   Traders enter the month of April and second quarter amidst volatility in
futures and meat values as traders come away from end of the month positioning
opportunities Tuesday. Overnight outside market pressure is expected to carry
increased market weakness early Wednesday.

By Rick Kment
DTN Analyst



Cattle: Lower   Futures: Mixed   Live Equiv $157.72 -5.27*
Hogs:   Lower   Futures: Mixed   Lean Equiv $ 69.93 -5.67**

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

GENERAL COMMENTS:

   Limited early direction is expected in cash cattle trade with bids likely to
remain quiet through most of the morning. Although the Fed Cattle exchange is
expected to trade during the morning with another strong run of cattle
offerings, but it is unlikely to create underlying market direction for the
week given the wide moves in futures and beef values over the last couple of
days. Asking prices are expected to remain at $120 and higher live and $190 and
higher dressed basis, but the swiftly eroding beef cutout value is likely to
limit additional underlying pressure through the end of the week if wholesale
beef prices continue to shift lower. Choice cutout values, which fell $7.82 per
cwt Tuesday posted a record loss as growing concerns of overall beef demand may
continue to erode through the upcoming weeks as the coronavirus pandemic
continues to take hold of the nation. No amount of increased ground beef sales
in the retail market can make up for the losses of high value beef cuts in both
the retail and food service sector. Active cash market trade may be delayed
until the end of the week with the focus on further moves in beef values and
futures activity through the first few days of April. Futures trade is expected
mixed to mostly lower as traders adjust to a new month and quarter on the
books. The surge in futures prices Tuesday had more to do with end-of-the-month
and quarter positioning than establishing market direction, which is likely to
add even more volatility to the current complex. With strong open interest
liquidation seen during the month of March, the focus on regaining buyer
interest during early April as traders prepare for what could be another
volatile and uncertain couple of months, is creating the potential for wide
market swings in the near future. Wednesday slaughter is expected at 121,000
head.
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