DTN Early Word Opening Livestock 03/31 06:36

DTN Early Word Opening Livestock 03/31 06:36 Market Pressure Expected as March Comes to an End The month of March is coming to an end, and with it many hope the nightmare that has developed over the last month will end too. Underlying pressure is expected to be seen once again Tuesday, especially in lean hog trade, which posted another limit loss Monday. By Rick Kment DTN Analyst Cattle: Lower Futures: Lower Live Equiv $162.99 -1.82* Hogs: Lower Futures: Lower Lean Equiv $75.60 -3.08** * 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 activity remains quiet with limited interest from either side going into Tuesday morning. The strong rally in prices seen last week may be a limiting factor in follow-through support through the week, especially given the fact that cattle futures have significantly backed away from previous highs. The underlying pressure developing in boxed beef values is pointing to expected demand slumps as retailers seem to have caught up with the surge of buying activity seen over the last couple of weeks and significant demand erosion is likely to be seen from the food service industry. With the expectation that social distancing and "stay home orders" that are in place are being extended through the end of April, this will continue to significantly affect the amount of beef moving through the restaurant systems. Even though businesses are trying to stabilize business through drive thru, carry out and delivery services, this still is a far cry from replacing the "dine in" demand across the nation. Reports that JBS will reduce slaughter plant production due to a COVID-19 case in an Eastern U.S. plant will likely add increased pressure to live cattle futures. At this point, it is not expected that this will affect fabrication or grinding operations, and should have a limited impact on the overall daily slaughter levels, but it still may have a significant impact on futures and cash prices as this is the first indication that Coronavirus will affect production levels of beef production. Tuesday slaughter is expected at 118,000 head.