DTN Before The Bell Livestock

Limited Activity Keeps Markets Stable

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)

GENERAL COMMENTS:

Strong gains seen Thursday has left the entire livestock market looking for additional direction. So far, prices have remained mixed in a narrow range with traders content with the market stability Friday morning. Limited market news or direction is expected to develop before the weekend break, potentially allowing prices to coast through the trading session at current price levels. Corn futures are trading lower in mixed trade. Stock markets are mixed in limited morning trade. Dow Jones is 49 points higher with NASDAQ down 46 points.

LIVE CATTLE:

Open: Mixed. Late-week positioning appears to be the main focus in all livestock trade Friday, with cattle futures trading in a mixed range from 10 cents lower to 12 cents higher. The underlying support seen Thursday appears to be holding, but with very few traders willing to step back into the market, it may keep prices from showing additional support before the end of the week. Cash cattle trade has trickled in through the week with prices generally steady all week long. Although prices are elevated from last week's level, the overall lack of aggressive market shifts in cash trade may limit additional Friday movement. Traders will be focusing on the potential that market lows may have been set, as the industry continues to work through the abundant supply of cattle available over the coming weeks. Open interest slipped 2,618 positions (259,851). August contracts lost 8,827 positions (87,506) and October contracts added 4,633 positions (83,613). DTN projected slaughter for Friday is 120,000 head.

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FEEDER CATTLE:

Open: Mixed. Price moves have been incredibly narrow in nearby contracts Monday with traders doing very little to move the price needle at the end of the week. All nearby contracts are trading between 2 cents lower and 5 cents higher, leaving very little incentive for traders to step into the complex at this point. This could keep volume sluggish through the end of the day with prices hovering in a narrow range. Cash index for 7/8 is $133.69, up 3.54. Open interest Thursday added 313 positions (37,737).

LEAN HOGS:

Open: Mixed. Limited follow-through buying is slowly trickling into July contracts, while traders have focused on backing away from the aggressive Thursday gains seen in other nearby contract months. Very little direction is seen across the complex with the majority of Thursday's buyer support and firming direction still holding as traders seem to be preparing for the weekend rather than any significant market shift at the end of the week. Cash hog trade is called 50 cents lower to 50 cents higher. Most bids are steady to firm. Open interest fell 3,187 positions (225,769). July fell 2,283 positions (12,100) and August slipped 5,934 positions (69,524). Cash lean index for 7/8 is $45.18, down 0.17. DTN projected slaughter for Friday is 468,000 head. Saturday runs are expected near 278,000 head.

Rick Kment can be reached at rick.kment@dtn.com

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Rick Kment