DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate to firm pressure seen through the livestock futures complex with the most aggressive losses seen in lean hog trade. The underlying weakness in nearby and deferred lean hog futures is causing some concern about holding previous support levels and minimizing potential long term liquidation. Corn prices are mixed in light trade. Stock markets are higher, Dow Jones is 112 points higher while Nasdaq is up 26 points.

LIVE CATTLE:

Open: Mixed. Live cattle futures are trading mixed to mostly lower although limited pressure is seen in the complex Thursday morning. Nearby contracts are holding 5 to 7 cent losses with very limited activity expected to be seen through most of the morning. Although there could be some shifts developing later in the morning, the focus on increased overall trade activity in the cash and wholesale beef markets may have a larger impact in futures trade late in the week. Cash cattle trade is sluggish Thursday morning following another very light round of cash trade late Wednesday afternoon. These prices are steady to $1 lower in most areas from last week, but generally steady with prices seen early in the week. The entire cash market is likely to trickle in through the week, although prices seem to have found a range. Asking prices are seen from $128 to $130 live and $207 and higher dressed. Open interest Wednesday slipped 1,642 positions (370,629). Spot month April contracts lost 7,211 positions (109,707) and June contracts added 2,546 positions (137,485). DTN projected slaughter for Thursday is 117,000 head.

FEEDER CATTLE:

Open: Mixed. Feeder cattle trade has hovered in a mixed but narrow trading range early in the session Thursday. Nearby contracts have been contained to single-digit price shifts as traders try to assess the direction of outside markets and the potential for increased overall activity through the rest of the week. The inability to rekindle earlier market gains is putting the complex in a weaker tone as traders are looking for direction from outside sources. Cash index for 3/6 is listed at $144.96 down 0.29. Open interest Wednesday fell 94 positions (56,063).

LEAN HOGS:

Open: 60 to 90 cents lower. Firm pressure is quickly redeveloping in lean hog futures early Thursday morning with very little volume seen early in the session. The concern that nearby prices will once again test, and potentially break through short- and long-term support is causing some uncertainty through the entire market. Outside market direction is also a big factor in the hog complex through the week as this could have potential long term impacts on pork exports. Cash hog trade Wednesday is expected steady to $1 per cwt lower. Most bids are expected steady to weak. Open interest Wednesday liquidated 345 positions (223,383). Spot month April fell 5,489 in positions (66,384) and June gained 3,320 positions (59,813). Cash lean index for 3/6 is $67.66, up 0.14. DTN projected slaughter for Thursday is expected to be 465,000 head. Saturday runs are expected at 115,000 head.

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

(SK)

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