DTN Before The Bell-Livestock

GENERAL COMMENTS

Strong losses have quickly developed Friday as traders focus on squaring positions following aggressive triple-digit gains. The underlying weakness may continue to develop through most of the session. Corn prices are lower in light trade. Stock markets are lower, Dow Jones is 92 points lower while Nasdaq is down 21 points.

LIVE CATTLE:

Open: 80 cents to $1.50 lower. Strong losses have quickly developed in all cattle trade. The live cattle market is turning lower with pressure from feeder cattle markets and the concern that additional weakness will be seen in the cash cattle trade. There is growing uncertainty in overall market support following the recent gains. This is expected to leave markets unsupported through most of the day Friday. Cash cattle interest is at a standstill, with bids undeveloped at this point. Asking prices are holding at $120 and higher live basis and $190 to $192 dressed. Packer interest is expected to improve through the day as additional deals need to be done by the end of the day. Open interest Thursday liquidated 1,289 positions (355,985). Spot month April contracts lost 2,056 positions (28,102) and June contracts fell 1,500 positions (159,535). DTN projected slaughter for Friday is 116,000 head.

FEEDER CATTLE:

Open: $1 to $2 lower. Early trade Friday seemed to scoff in the face of recent market gains as moderate to strong losses have developed in all contracts. The concern that additional pressure may be seen through the end of the week as trader's square positions is adding even more weakness to the complex. This may add some increased volatility through the Friday session. Cash index for 4/4 is listed at $135.31 up 0.81. Open interest Thursday fell 1,814 positions (51,090).

LEAN HOGS:

Open: 50 cents to $1 lower. Firm end of the week trade is seen across the lean hog futures complex. This is adding to the concern in all livestock markets, but driven by end of week positioning. The strong market rally in the last few days has pushed nearby contracts nearly $3 per cwt off of long term lows, But there still remain a lot of questions as to how much follow through buying will develop, and if domestic demand will be able to carry the load of growing supply levels. Cash hog trade Thursday is expected steady cents to $1 lower. Bids are scattered through the range. Open interest Thursday added 50 positions (240,277). Spot month April fell 1,667 in positions (16,288) and June added 1,014 positions (101,846). Cash lean index for 4/4 is $55.27, down 0.33. DTN projected slaughter for Thursday is expected to be 455,000 head. Saturday runs are currently estimated at 167,000 head.

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

(SK)

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