DTN Early Word Opening Livestock 01/31 06:42

DTN Early Word Opening Livestock 01/31 06:42 Hog Markets Desperately Searching for the Bottom The market free fall in lean hog futures has quickly shaken any sense of market support in the complex. April futures have fallen nearly $10 per cwt in the last week based on fears that expected China demand may not develop as previously expected. By Rick Kment DTN Analyst Cattle: Lower Futures: Mixed Live Equiv $143.08 -0.18* Hogs: Steady Futures: Lower Lean Equiv $ 75.89 -0.49** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue GENERAL COMMENTS: Moderate cash cattle trade developed through the South Thursday afternoon with prices hovering at $122 per cwt. This is steady with the limited midweek trade Wednesday, but $2 per cwt lower than last week. The underlying pressure in the complex is not a significant surprise given the fact that futures trade has tumbled lower the last week and beef values have been lackluster at best. Thursday trade in the North was limited to $194 to $195 per cwt, but some trade will potentially hold out until after the Cattle Inventory report Friday afternoon. Although this may not prove to be a significant change in market structure, the expectation of lower overall cattle inventory, especially lower beef cow numbers should bring some underlying support to the entire cattle complex. Given the fact that market moves the last week have had very little to do with rational thought and decisions, it is hard to expect trade to flip a switch and return to "rational decision making" before the end of the week. Futures trade showed light-to-moderate support Thursday as it appears the bearish undertone may be running out of gas in the cattle complex. Although the complex still remains oversold, the potential for end-of-the-month short-covering may quickly allow for price support at the end of the week. But the general tone of all livestock markets still remains generally weak as traders remain concerned about the short- and long-term impact of coronavirus in China, and the impact on not only immediate beef demand, but long-term economic factors. Friday slaughter runs are expected near 121,000 head.