DTN Early Word Opening Livestock 04/01 06:29

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.