DTN Before The Bell-Livestock

Cattle Futures Mixed in Early Friday Trade

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

Livestock futures remain mixed in a narrow trading range. The light pressure in cattle futures is being offset by follow through gains in the hog complex. There continues to be some additional buyer activity moving through the entire complex. Corn prices are steady in light trade. Stock markets are higher, Dow Jones is 150 points higher while Nasdaq is up 46 points.

LIVE CATTLE:

Open: Steady to 30 cents lower. Light pressure is slowly developing early Friday morning. But the overall lack of aggressive market pressure may add some stability to the complex and allow buyer support to develop through the end of the week. Traders are not only focusing on the market correction seen in the futures trade over the last few days, but also are very aware of potential shifts that may follow the cattle on feed report which could draw additional trade to the table. Cash cattle activity remains quiet with bids undeveloped Friday morning. There may be some additional activity due to clean up sales through the end of the week, but the lion's share of trade is expected to be done, with prices likely set for the week. Open interest Thursday added 1,155 positions (372,186). Spot February lost 878 positions (3,668) and April contracts slipped 400 positions (143,233). DTN projected slaughter for Thursday is 117,000 head.

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FEEDER CATTLE:

Open: Mixed. End-of-week positioning appears to be stepping back into the market. There is additional support seen in the market with traders focusing on additional moves and the upcoming cattle on feed report seen through the end of the trading day. This may add even more uncertainty to the complex over the next couple hours. Cash index for 2/21 is listed at $148.05, up 0.06. Open interest Thursday added 33 positions (57,109).

LEAN HOGS:

Open: Steady to 50 cents higher. Firm buyer support is slowly stepping back into the market with prices in most contracts 20 to 40 cents per cwt higher as overall buyer interest may continue to be seen through the end of the week. There is a potential to see some position squaring try to move into the market at the end of the day due to the aggressive market surge in the complex over the last couple of days. Cash hog trade Friday is expected steady to $1 lower. Most bids are expected to be steady. Open interest Thursday gained 1,289 positions (230,743). Spot month April fell 1,162 in positions (90,456) and June gained 816 positions (48,268). Cash lean index for 2/21 is $70.17, down 0.61. DTN projected slaughter for Friday is expected to be 450,000 head. Saturday runs are expected at 121,000 head.

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

(SK)

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Rick Kment