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DTN Early Word Opening Livestock       02/26 06:27
   Additional Technical Losses Possible Through Cattle Trade

   Early week pressure in cattle futures swiftly changed the market direction
with live cattle futures falling more than $5 per cwt in the past two days,
while feeder cattle losses were even more aggressive. Traders are searching for
underlying stability to build on over the coming days.

By Rick Kment
DTN Analyst

Cattle: Steady with Tuesday   Futures: Lower   Live Equiv $137.73 -0.47*
Hogs:   Steady                Futures: Mixed   Lean Equiv $ 70.92 -0.35**

*  based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue


   Aggressive follow-through liquidation late Tuesday in live cattle futures
sparked the development of light cash cattle trade. The eroding market
structure gave the opportunity for packers to sweep in with lower bids. The
recent tumble in futures trade caused fear in many feedlot managers, and prices
later in the week could see additional sharp losses. Although it is expected
that some additional trade will likely be done before the end of the week,
prices fell to $187 dressed in the North, a $3 per cwt loss from last week's
average. Sales in the South developed $5 per cwt lower at $115 per cwt. Unless
a major correction is seen in live cattle futures the next couple of days,
these price levels are likely to set the tone for weekly cash cattle prices.
Futures trade is expected mixed during early trade. Although a strong
underlying weak tone remains evident, aggressive selling across the live cattle
complex has broken through short-term support levels and will likely attract
moderate buyer support in order to cover short positions. Outside market
direction is expected to play a significant role in the direction and activity
level in cattle trade Wednesday, as the late day tumble in stock markets
Tuesday pulled cattle markets away from the mixed price moves early in the
session. Similar patterns are likely in midweek trade with buyers likely to
stick their toes in the water, looking for an opportunity to buy at these
levels. But if widespread liquidation continues in outside markets, any early
market support could quickly erode. Continued global concerns of the spread of
coronavirus continues to leave markets weak even though the market remains in
an oversold status. Wednesday slaughter is expected near 121,000 head.
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