DTN Before The Bell-Livestock

GENERAL COMMENTS

Cattle and hog markets are stuck in a narrow trading range Friday morning as traders look for additional longer-term direction and the moves in cash trade to help set the tone of the market through the rest of the complex. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 247 points higher while Nasdaq is up 54 points.

LIVE CATTLE:

Open: Steady to 20 cents lower. Narrow losses have trickled into most nearby contracts with very limited market direction developing across the complex. Overall trade activity is expected to remain sluggish with very little interest seen in the market although outside market shifts may play a big role in the overall trade volume later in the day. Cash cattle activity remains quiet once again Friday. Bids have been redeveloped at $124 on a live basis, similar to levels earlier in the week. More interest is expected as the day progresses, but it may not be until late in the day before sales are reported. Open interest Thursday lost 1,370 positions (366,376). Spot February lost 1,017 positions (19,468) and April contracts slipped 1,211 positions (149,902). DTN projected slaughter for Friday is 115,000 head.

FEEDER CATTLE:

Open: Mixed. Limited trade activity is likely to help draw buyer interest back to the market as nearby contracts are holding 20 cent gains. There is growing support that additional market activity could move back into the market at the end of the week, but volatility through the week in outside markets has created some uncertainty about long term market support. This may keep prices limited with very little activity seen through the complex. Cash index for 2/2 is listed at $148.12, up 0.09. Open interest Thursday added 111 positions (56,205).

LEAN HOGS:

Open: Mixed. Limited trade activity is expected to be seen during early Friday trade. The mixed price direction seen Thursday is expected to lead to additional market shifts even though overall activity is likely to remain mixed. The focus on firming spot month prices could bring additional interest back to the table through the rest of the day. Cash hog trade Friday is expected 50 cents to $2 lower. Most bids are expected to be $1 lower. Open interest Thursday fell 5,210 positions (231,418). Spot month February liquidated 1,700 positions (9,894) and April lost 2,126 positions (99,116). Cash lean index for 2/2 is $74.48, up 0.38. DTN projected slaughter for Thursday is expected to be 445,000 head. Saturday runs are estimated at 97,000 head.

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

(SK)

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