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DTN Early Word Opening Livestock       04/02 06:26
   Livestock Markets Brace for Additional Losses

   Limit losses across all livestock markets Wednesday has brought bearish
movement in the complex heading into Thursday morning. Although limited outside
market support developed overnight, the concern of demand weakness for meat
products weighs heavy on livestock futures.

By Rick Kment
DTN Analyst



Cattle: Lower   Futures: Lower   Live Equiv $153.55 -4.17*
Hogs:   Lower   Futures: Lower   Lean Equiv $ 66.94 -2.99**

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

GENERAL COMMENTS:

   Although there still is a lot of cattle to trade in the cash cattle arena
before the end of the week, the sharp losses Wednesday are expected to set the
tone for the market. Light trade developed in several areas through the day
Wednesday with live Southern trade falling generally $7 per cwt from last week
at $112 per cwt, while dressed deals in the North are reported at $180 per cwt.
This is $9 per cwt below last week's average cash price. The potential for
additional futures market weakness is likely to add follow-through pressure in
cash trade as the week continues. This could significantly limit the amount of
cattle sold through the week. Additional sharp losses in boxed beef values
midweek has started the landslide of price shifts lower as traders remain
concerned of further demand erosion. As consumer buying patterns are becoming
more regular after the panic buying and hoarding that pushed beef values
through the roof during March, the focus on a generally shuttered food service
industry and the lack of beef demand in that market space is starting to create
the reality that product may continue to be backed up over the near future.
Futures trade is expected mixed in light early trade Thursday with live cattle
and feeder cattle having access to expanded trading limits. This would limit
live cattle at $4.50 per cwt once again, while feeder cattle limit will be set
at $6.75 per cwt. The strong overnight support in financial markets could help
to soften the blow, but the underlying fundamental weakness in the complex
continues to spark uncertainty in the complex. June futures have the potential
to test long-term support and contract lows, which could spark renewed
volatility though the end of the week. Thursday slaughter is expected at
119,000 head.
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