DTN Early Word Opening Livestock 04/22 06:35

DTN Early Word Opening Livestock 04/22 06:35 Limited Cash Buying Adds Additional Pressure to Meat Complex Coronavirus cases continue to limit the effectiveness of the packing system with the lower production limiting delivery of cattle and hogs to plants. This not only affects cash markets, but it is also significantly impacting already committed cattle and hogs. By Rick Kment DTN Analyst Cattle: Lower Futures: Mixed Live Equiv $167.68 +7.07* Hogs: Lower Futures: Mixed Lean Equiv $ 74.94 +3.27** * 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 cash cattle activity developed Tuesday, but as would be expected given the overall lack of processing ability, cash prices remained significantly lower than last week's average price levels. Although there still isn't enough cattle traded to establish a good market trend, the cattle that sold posted prices of $94 to $95 live in the South and $149 to $150 dressed in the North. This is $5 to $6 per cwt lower live and $7 to $8 per cwt lower dressed than last week's average. The uncertainty of how many cattle will once again be bought on the cash market is likely to add even more pressure through the end of the week. Although basis levels still remain well above average, they are quickly moving away from the historical levels in March and early April, creating additional concern that additional basis erosion will develop in the coming weeks. Cattle futures are expected to remain mixed in a moderate range early Wednesday morning. Following the firm pressure Tuesday, live cattle and feeder cattle market still remain firmly planted above long-term lows, but unable to show significant short- or long-term buyer support given the limited processing capability and growing uncertainty of food service demand. Although retail beef demand remains strong, there is uncertainty about moving all cuts of meat through retail channels as a weaker economy is likely in the coming days and weeks. The focus on ground beef stocks seem to be the focus at local stores, with ample supplies of higher end cuts still on the shelves. This could continue to disrupt the ability to push beef cutout values higher even though overall movement of product remains strong. Wednesday slaughter is expected at 92,000 head.