DTN Early Word Opening Livestock 03/05 06:33

DTN Early Word Opening Livestock 03/05 06:33 Livestock Futures Look for Further Market Recovery Moderate-to-strong gains in all livestock trade Wednesday points to additional market optimism developing through the week. The extreme volatility the last two weeks is likely to create additional wide market swings as the recovery period develops. By Rick Kment DTN Analyst Cattle: Steady to Lower Futures: Mixed Live Equiv $137.83 -0.26* Hogs: Steady Futures: Mixed Lean Equiv $ 70.62 -0.31** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue GENERAL COMMENTS: Despite the moderate bounce in futures prices, cash cattle prices posted another significant loss Wednesday with light-to-moderate trade developing in most areas at $113 per cwt live basis. At this point, there is still little indication on where dressed cattle trade will land due to sketchy asking prices and bids in that arena. But it would be fair to say that prices in all cash cattle markets are expected to be lower than last week with additional trade likely to follow the midweek lead of $2 per cwt lower. The direction of futures trade and outside market factors early Thursday will likely play a significant role in the overall activity levels of the cash market trade, but the tone seems to have been set for the week. Combined with last week's $5 per cwt losses, the total two-week cash market losses are likely to be settling at $7 per cwt. In comparison, April live cattle futures are currently trading nearly $9 per cwt below mid-February price levels. This indicates that as of now, cash markets have not fully priced in futures losses. The argument can easily be made that if futures trade continues to show firm recovery, the cash market will not fully realize the pressure seen in futures trade and could start to rebound over the next two weeks. But growing uncertainty about consumer habits as more U.S. coronavirus cases pop up on a daily basis could continue to limit the market recovery. With April live cattle nearly $4 per cwt above long-term lows, it is expected that further market recovery will be the focus through the end of the week, but the inability for outside markets, especially the stock market to continue to move higher could quickly squash price support through cattle trade. Wednesday slaughter is expected near 121,000 head.