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DTN Early Word Opening Livestock       01/28 06:34
   Market Volatility Expected to Continue

   Limit losses Monday in cattle and hog futures have opened the door for
expanded trade limits in all livestock contracts. Continued concerns of
coronavirus in China has caused overall meat demand growth to be questioned.

By Rick Kment
DTN Analyst


Cattle: Steady   Futures: Mixed   Live Equiv $142.93 -0.40*
Hogs:   Steady   Futures: Lower   Lean Equiv $ 82.25 -0.12**

*  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 market activity remains at a standstill early Tuesday morning,
but this is not surprising given the limited early-week activity and bearish
market shifts in futures trade. Asking prices and bids are undeveloped at this
point, and likely may not be active until midweek or later. It is expected that
both cattle feeders and packers will desire to wait until some of the dust
settles surrounding the futures trade before actively entering the market.
Late-week trade is not unlikely given the overall volatility in the entire
complex. Futures trade is expected mixed, although a strong bearish tone
continues to hold over the complex following limit losses in live cattle and
feeder cattle trade Monday. The limit losses Monday will allow for expanded
trading limits in all cattle markets, sparking increased potential for wide
technical shifts through the upcoming days. Although futures trade is posting
three-month lows, the pressure in the market during 2019, still has prices far
from setting long-term support levels. But the moves lower the last two weeks,
have moved prices away from the top end of the trading range. This may create
some significant market boundaries through the spring months, potentially
locking live cattle and feeder cattle within a wide sideways trading range in
the upcoming months. Moderate short-covering attempts are likely early Tuesday
morning as traders try to take advantage of limited early volume, but the
underlying tone of the market is expected to remain generally weak. Tuesday
slaughter runs are expected near 122,000 head.
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