DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade is seen in livestock futures with most contracts holding a narrow trading range due to sluggish morning activity. The pressure seen in most markets through the day Thursday has created some position-taking opportunities in all markets. Corn futures are fractionally higher in light trade. Stock market futures are higher, Dow Jones is 144 points higher while Nasdaq is up 7 points.

LIVE CATTLE:

Open: Mixed. Narrow trading ranges are seen through the complex Friday, although trade ranges have remained narrow with very little direction developing across the complex. There is growing pressure to focus on the additional losses seen across the complex as markets are seen from 20 cents lower to 10 cents higher in early trade. It is likely that volume will remain sluggish through most of the Friday session. This may spark some additional interest early next week, but most traders are willing to stay on the sidelines as they look for longer term market direction. Cash cattle activity is expected to be done for the week following trade that trickled into the market starting Monday. There is the potential for some additional clean up activity, but the direction of the market and price levels should be consistent with early week trade. Open interest Thursday added 3,647 positions (349,341). Spot February lost 4,891 positions (82,680) and April contracts gained 6,790 positions (127,432). DTN projected slaughter for Friday is 116,000 head.

FEEDER CATTLE:

Open: Steady to 30 cents lower. Light activity is seen in the feeder cattle complex following mixed trade Thursday. The underlying weak tone in the cattle market continues to be seen and may bring about follow through pressure late Friday. Traders are also focusing on outside market moves and this may bring about increased trade activity over the near future. But through the end of the week, most contracts are expected to limp along in a sideways to lower pattern with most long-term direction likely to wait until next week. Cash lean index for 1/10 is listed at $148.81, down 2.76. Open interest Thursday added 528 positions (52,317).

LEAN HOGS:

Open: Mixed. Following the sharp losses that flooded into the market Thursday, light to moderate buyer support is seen in nearby contracts as traders focus on short covering activity at the end of the week. The tone of the market remains weak after nearby contracts held triple-digit losses. But there remains the potential for increased market shifts over the near future. The firm cash hog values is likely to draw increased market support over the end of the week, while traders look for increased market activity from outside markets. Cash bids are mixed. Most bids are steady to 50 cents higher. Open interest Thursday liquidated 5,556 positions (244,177). Spot month February fell 8,829 positions (49,443) and April added 2,646 positions (90,079). Cash lean index for 1/10 is $68.46, up 1.81. DTN projected slaughter for Friday is expected to be 465,000 head. Saturday runs are expected at 161,000 head.

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

(SK)

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