DTN Before The Bell Livestock

GENERAL COMMENTS:

Narrow trading ranges are seen in all livestock trade with limited overall price shifts expected most of the day. Traders continue to focus on the afternoon release of the Cattle on feed report, focusing on placement levels during the month of July. Corn remains lower in light to moderate trade. Stock markets are mixed in limited morning trade. Dow Jones is 84 points lower with NASDAQ up 30 points.

LIVE CATTLE:

Open: Mixed. Limited activity is seen early Friday morning as traders continue to hold prices within a narrowly mixed trading range. Most nearby contracts are holding losses from 10 to 15 cents lower, while limited buyer support is seen in summer 2021 contracts. Traders are looking for additional direction from Friday's cattle on feed report, but if the report is within expectations, very little market reaction is likely. Cash cattle bids are quiet Friday morning. The early-week trade $1 to $2 per cwt higher than last week moves may help to stimulate additional late-week activity. Asking prices are $107 and higher live in the South and $175 and higher dressed. Open interest gained 681 positions (293,402). August contracts lost 951 positions (3,529) and October contracts slipped 192 positions (124,293). DTN projected slaughter for Friday is 117,000 head.

FEEDER CATTLE:

Open: Mixed. Feeder cattle trade remains mixed in a very narrow trading range Friday morning. Nearby and deferred contracts are contained in single-digit moves, although underlying late-week buying could slowly develop as position taking is being done ahead of the afternoon report. Feeder cattle placement in the cattle on feed report is the most speculated and uncertain number traders are watching. This could create some late-day market shifts, and if placements differ significantly from expectations, some volatility early next week. Cash index for 8/19 is $142.80, up 0.18. Open interest Thursday gained 753 positions (47,673).

LEAN HOGS:

Open: Mixed. Following the optimism seen Thursday after posting strong triple-digit gains, traders seem to be generally disappointed by the lack of follow through buying activity. Early price moves have been subdued in a narrowly mixed range, although the focus on underlying technical bullish support in nearby contracts could point to even further weekly gains, especially in October and December futures. Traders will also closely monitor outside market moves and the ability to stimulate additional cash price support over the next few days. Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady to 50 cents higher. Open interest fell 3,343 positions (217,196). October added 1,731 positions (101,646) and December added 934 positions (52,884). Cash lean index for 8/19 is $55.41, up 0.33. DTN projected slaughter for Friday is 479,000 head. Saturday runs are expected at 235,000 head.

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

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