DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate gains are developing in all livestock trade as hog and cattle markets have posted firm support early Thursday morning. With markets closed Friday due to Good Friday, the focus across the market has been shifted to not only end of week positioning, but also adjusting positions for month and quarter end. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 145 points higher while Nasdaq is up 14 points.

LIVE CATTLE:

Open: 50 to 80 cents higher. Moderate gains have slowly developed once again in live cattle futures. Traders seem to have focused on the slow and steady mentality when it comes to regaining support in live cattle trade. Unlike the aggressive triple-digit gains seen in the last few days across the feeder cattle market, the focus on building stability seems to be the direction most traders are heading. It is uncertain just how much support will develop through the end of the week. Traders are also trying to square positions ahead of the long weekend and end of the month and quarter. Cash cattle markets remain quiet early Thursday morning following light to moderate trade seen in many areas. Most of the trade was seen in the South with live deals seen at $121 per cwt. This about $4 per cwt lower than last week's price, as both sides try to wrap up trade activity before Good Friday. More activity is needed in the North with the few cattle sold Wednesday selling for $190 to $194 per cwt. This could be enough to set the tone of the market heading into the long holiday weekend. Open interest Wednesday added 298 positions (357,460). Spot month April contracts lost 2,564 positions (40,461) and June contracts fell 253 positions (159,654). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: 50 cents to $1 higher. Firm follow-through gains are developing in nearby feeder cattle future. The recent buyer support has stimulated additional buyer support through the end of the week. Nearby futures have rallied $4 to $5 per cwt in the last three trading sessions, which is causing many traders to focus on additional follow through support that may develop during early April. End of week positioning is likely to limit the longer term direction through the day as traders trying to square positions could allow for choppy price shifts. Cash index for 3/27 is listed at $136.23 up 0.01. Open interest Wednesday fell 358 positions (54,285).

LEAN HOGS:

Open: Steady to 50 cents higher. Narrow gains have developed early Thursday morning. The sharp triple-digit losses seen midweek are helping to bounce prices off of long-term market lows, and could help to stimulate additional buyer interest over the next couple of weeks. But the biggest focus Thursday is going to be end-of-month and -quarter position taking as markets will remain closed Friday. This may allow for mixed price shifts to be seen through the entire complex. Cash hog trade Wednesday is expected steady to $1.50 lower. Most bids are $1 per cwt lower. Open interest Wednesday lost 3,036 positions (236,624). Spot month April fell 1,624 in positions (22,517) and June eroded 1,487 positions (98,971). Cash lean index for 3/27 is $59.85, down 0.73. DTN projected slaughter for Thursday is expected to be 465,000 head. Friday runs are scheduled at 430,000 head, with 108,000 on Saturday and 320,000 on Monday.

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

(SK)

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