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DTN Early Word Opening Livestock       05/24 06:33

   Limited Livestock Trade Expected Friday

   Market interest is expected to remain extremely sluggish Friday ahead of the 
three-day holiday weekend. Mixed trade is expected early in the session with 
cattle traders attempting to adjust to the upcoming cattle on feed report. 

By Rick Kment
DTN Analyst

Cattle: Steady to $2 Lower  Futures: Mixed  Live Equiv $143.79 +053* 
Hogs:   Steady              Futures: Mixed  Lean Equiv $87.63 -2.21**
*   based on formula estimating live cattle equivalent of gross packer revenue 
** based on formula estimating lean hog equivalent of gross packer revenue


   Following moderate trade over the last two days, cash cattle markets appear 
to be essentially done for the week. Although the potential for some clean up 
trade may develop, the tone of the market is expected to be set with prices at 
$114 to $116 live and $184 to $185 dressed. Generally cash prices for the week 
were steady to $2 per cwt lower depending on the area of the country and 
delivery terms for cattle sold. Futures trade is expected mixed as traders 
adjust to outside markets early Friday but quickly turn attention to the 
upcoming cattle on feed report where pre-report expectations point to a strong 
shift higher in overall cattle in feedyards as well as increased placement 
levels. If the report is anywhere near the early estimates, a bearish tone is 
expected to hover through the complex. A portion of this bearishness has 
already been worked through market prices, but increased volatility early next 
week may quickly develop.

   Narrowly mixed trade is expected early Friday with limited new information 
available for the hog complex to trade at the end of the week. The underlying 
concerns surrounding the trade war with China is being countered by overall 
global demand for pork in the wake of African swine fever. This will continue 
to be the plot of the lean hog complex over the near future with very little 
additional information on either issue available in order that traders can put 
specific numbers too. This will become a challenge through most of the summer 
as the anticipated target will continue to steadily move day-to-day, and will 
likely keep markets swinging from one direction to another. The fact that China 
was back in the market last week buying pork, is encouraging, although given 
the overall history or China sales, until the product is shipped, it should not 
give traders too much confidence. Cash trade is called steady to $1 lower 
Friday morning with bids scattered through the range. Expected slaughter Friday 
is at 458,000 head. Saturday runs are expected at 43,000 head. 

   BULL SIDE                             BEAR SIDE
1) The upcoming Memorial Day holiday  1) Growing concerns of expanding cattle
   weekend is expected to spark          supplies ahead of the cattle on feed
   additional buyer support and focus    report is likely to cause market
   on demand strength through the        pressure as traders adjust to
   complex.                              potential cattle placement levels.
2) The ability to hold short-term     2) The long holiday weekend may create
   support levels of $109.50 per cwt     additional pressure Friday with
   in June futures is helping to         limited trade volume expected through
   create additional technical           the end of the week, as well as
   interest through the entire           traders having to hold any cold
   complex.                              storage report data until Tuesday when
                                         markets reopen following the holiday
                                         break. This may add a bearish tone to
                                         the complex next week.
3) Strong cash hog support late       3) Sharp losses in pork cutout values
   Thursday helped to regain overall     once again focus on wide primal market
   market confidence that tighter        shifts and the concern that summer
   market ready hog supplies are seen    domestic demand is being hampered by
   at the end of the week, pointing      previous price support.
   to additional further clearance
   over the near future.

4) Active export sales to China in    4) The overall trade deal with China and
   weekly export sales report is         overall global economic concerns will
   expected to continue to bring         continue to hold a dark cloud over the
   stability to the entire lean hog      hog complex as traders remain
   complex over the near future. This    uncertain of a timeline of even
   may help spark additional             direction that the market will take
   underlying support through the        before any resolution is seen.
   entire complex.

   Rick Kment can be reached


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