DTN Early Word Opening Livestock 04/14 06:32

DTN Early Word Opening Livestock 04/14 06:32 Markets Show Additional Weakness as Week Continues Increased cases of the coronavirus at several packing plants around the country continue to add uncertainty surrounding the ability to keep the meat processing system online without causing backlogs on both ends of the system. By Rick Kment DTN Analyst Cattle: Lower Futures: Lower Live Equiv $145.71 +0.58* Hogs: Lower Futures: Lower Lean Equiv $ 57.83 +0.02** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue GENERAL COMMENTS: Cash cattle markets remain quiet with bids and asking prices hard to find early in the week. It is likely that even with the market freefall in futures trade seen Monday, active cash cattle trade may not develop until later in the week. With reduced overall slaughter capacity expected due not only to the plants that have stopped production due to the virus, but absenteeism in other plants will keep overall operating speeds limited for the near future. This will likely add additional pressure on cash markets as packers will utilize committed cattle first, filling the gap with cash-bought cattle. Sharp losses in futures trade Monday as traders returned from the long Easter weekend sparked renewed bearishness in the complex. These aggressive losses early in the week also opened the door for expanded trading limits in all cattle trade. Live cattle will be limited to a $4.50 per cwt loss, while feeder cattle futures will be allowed to move $6.75 per cwt before markets are halted Tuesday. The concern in the packing industry and further shutdowns focused on both ends of the processing line. Limited capacity will back up market-ready animals and limit the ability to keep the market current. But for the general public, continued reductions to processing capacity could quickly add additional meat shortages in the retail market if packers cannot keep up with demand. There is a lot of uncertainty at this point where demand levels are at due to the ever changing focus and lack of food service demand while increased retail demand continues to develop. Tuesday slaughter is expected at 106,000 head.