DTN Before The Bell-Livestock

GENERAL COMMENTS

Light trade is seen in cattle and hog futures early Friday morning with very limited short or long term direction expected to be seen before the end of the week. Mixed price ranges are seen in live cattle and hog futures, which may limit overall market ranges through the rest of the session. Corn prices are mixed in light trade. Stock markets are lower Dow Jones is 284 points lower while Nasdaq is down 75 points.

LIVE CATTLE:

Open: Mixed. Narrow trading ranges have developed in live cattle futures with mixed trade seen from 10 cents lower to 12 cents higher although most trade remains weaker Friday morning. The underlying weakness seen through the last week is adding even more uncertainty to the cattle complex. There may be some additional volume stepping back into the market, but this could focus more on position taking at the end of the week rather than a consistent market shift. Cash cattle markets are quiet early Friday morning with most if not all of the needed trade done for the week. Some light cleanup activity developed Thursday afternoon with prices steady with the midweek levels. There is likely to be more focus on market expectations for next week as it is still uncertain just how many cattle traded through the last couple of days. Open interest Thursday lost 295 positions (376,623). Spot month April contracts lost 4,005 positions (132,102) and June contracts added 1,504 positions (130,169). DTN projected slaughter for Friday is 115,000 head.

FEEDER CATTLE:

Open: Steady to 50 cents lower. Selling pressure has developed across feeder cattle trade early Friday morning. This is allowing for the limited pressure seen earlier in the week to step back into the market due to concerns surrounding the longer term direction of price levels. Nearby contracts are trading 20 to 40 cents lower in most contracts, which is likely to limit aggressive market activity through most of the morning. Cash index for 2/28 is listed at $147.33, down 0.61. Open interest Thursday fell 611 positions (57,266).

LEAN HOGS:

Open: Mixed. Moderate buyer support is quickly moving into nearby lean hog futures trade, but the limited volume in deferred contracts is keeping traders more cautious in 2019 contract months. This is leaving to choppy trade activity through the complex with prices likely to hover in a moderate to wide but mixed range through most of the morning. Little additional fundamental direction is developing, which is likely to allow for a wide market shift through the entire market. Cash hog trade Friday is expected steady to $1 lower. Most bids are steady to weak. Open interest Thursday liquidated 1,372 positions (232,348). Spot month April fell 2,491 in positions (82,628) and June gained 1,618 positions (53,204). Cash lean index for 2/28 is $68.36, down 0.21 DTN projected slaughter for Friday is expected to be 455,000 head. Saturday runs are expected at 130,000 head.

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

(SK)

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