DTN Early Word Opening Livestock 04/23 06:45

DTN Early Word Opening Livestock 04/23 06:45 Price Gap Between Livestock Values and Meat Prices Widen The gap between cash and futures prices of livestock and wholesale meat values continues to greatly widen as continued concern that limited packer capacity due to coronavirus closures will strand livestock on farms while limit meat supplies at the store levels. By Rick Kment DTN Analyst Cattle: Lower Futures: Mixed Live Equiv $176.58 +8.90* Hogs: Mixed Futures: Mixed Lean Equiv $ 77.97 +3.03** * 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 trade has started to trickle into the market in the first half of the week, however, there has not been enough consistent business to establish a good trend. Cash values will likely continue to show weakness from last week's levels based on the packers' limited ability to take cattle. Daily slaughter rates are coming in well below 90,000 head, which is nearly 30,000 head below the general pace for the spring. With plants either closed due to virus outbreaks, or running at reduced capacity based on limited attendance, overall slaughter capacity remains extremely limited. For all of the equipment and processing systems utilized at these modern plants, the entire packing system continues to be extremely dependent on many people working together in unison in order to keep a plant running. Some additional cash market interest is expected the next couple of days, but the overall limited packer capacity will likely limit price values at this point. Futures trade is expected to remain mixed as traders try to sort out the direction through the end of the week based on rapidly surging wholesale meat values and eroding cash prices. Increased talk about potential tight meat supplies at the consumer level is sparking double-digit surges in choice and select cutout values. This has moved cutout values over $50 per cwt higher in the last two weeks based on the concern of meat supplies available to consumers. Thursday slaughter is expected at 88,000 head.