DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock trade remains mixed in opening minutes of trade. The follow through pressure in most live cattle and lean hog futures is limiting interest in the feeder cattle markets which have moved higher Wednesday. Corn prices are higher in light trade. Stock markets are mixed, Dow Jones is 25 points lower while Nasdaq is up 5 points.

LIVE CATTLE:

Open: Steady to 30 cents lower. Narrow losses have developed across the live cattle futures early Wednesday morning. The focus on previously sharp losses has continued to impact longer term trade as traders look for increased direction through the end of the month. Cash cattle markets are quiet Wednesday morning, but the development of light trade has created a defensive tone to the market. There is growing uncertainty as to just how much additional direction will develop over the near future. There is also some concern that packers will be focusing on the ability to secure needed end of the week and month inventory, which could add trade activity over the next couple of days. Open interest Monday lost 1,709 positions (359,425). Spot month April contracts lost 4,441 positions (61,656) and June contracts added 185 positions (157,686). DTN projected slaughter for Wednesday is 116,000 head.

FEEDER CATTLE:

Open: Steady to 30 cents higher. Traders are focusing on light but firm short covering activity moving into the feeder cattle complex. This could help to draw additional buyer activity to the market as traders seem focused on trying to find some market stability through the entire complex. There is growing uncertainty as to just how much activity will develop over the near future. This could help to instill additional commercial and noncommercial interest during the end of the week. Cash index for 3/19 is listed at $141.53 down 0.20. Open interest Tuesday added 989 positions (51,612).

LEAN HOGS:

Open: Mixed. Light trade is once again seen in lean hog futures trade. The lack of active movement in the market follows the sluggish trade activity seen over the last couple of days. This could keep prices mixed to generally lower as most contracts are holding losses of 20 to 35 cents per cwt during the early trade activity. Cash hog trade Wednesday is expected Steady to $1 lower. Most bids are seen $1 per cwt lower. Open interest Tuesday added 2,630 positions (231,701). Spot month April fell 516 in positions (34,217) and June gained 2,154 positions (87,762). Cash lean index for 3/19 is $64.42, down 0.57. DTN projected slaughter for Wednesday is expected to be 465,000 head. Saturday runs are expected to hit 108,000 head.

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

(SK)

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