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DTN Early Word Opening Livestock       02/27 06:36
   Livestock Futures Cautious of Market Support

   Mixed trade midweek through livestock markets seemed to create a sense of
relief, although the underlying tone of the market remains weak. Traders are
still cautious given the lack of support in outside markets as the week
continues.

By Rick Kment
DTN Analyst



Cattle: Steady   Futures: Mixed   Live Equiv $136.95 -0.78*
Hogs:   Steady   Futures: Mixed   Lean Equiv $ 69.44 -1.48**

*  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 business may be done for the week following light-to-moderate trade
that developed Tuesday and Wednesday. Most of the trade on Wednesday was seen
as clean-up activity with prices steady with earlier trade this week. But these
prices are $3 to $5 per cwt below last week's trade levels. Live Southern trade
is at $115 per cwt for the week, while dressed trade in the North posted a
wider range from $184 to $187 per cwt, but both sides are willing to move into
the first week of March as they try to reestablish market stability in an
unstable market. Futures trade is expected mixed in limited early trade. This
continues to focus on the potential that buyers are willing to step back into
the complex following the aggressive sharp losses early in the week. The
continued weakness in outside markets and inability for stock markets to hold
early gains is keeping additional focus on recent market weakness. Triple-digit
gains in nearby feeder cattle trade through the session Wednesday was a good
sign, but the inability to sustain early gains in live cattle trade continues
to add uncertainty in the complex. With April and June live cattle futures
currently hovering above long-term support set last August and September, the
question of whether these support levels will hold is becoming a significant
reality. If April futures do break below $110.17 per cwt, the potential that
additional widespread commercial liquidation may quickly move into the complex
increases significantly. Even though most of the focus remains on global
instances of coronavirus, the underlying concern remains how the market will be
able to hold if increased outbreaks are seen in the U.S. Wednesday slaughter is
expected near 121,000 head.
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