DTN Before The Bell-Livestock

GENERAL COMMENTS

Buyer support has slowly but steadily moved into the livestock complex early Wednesday morning. The moderate gains in all markets has allowed for follow through buyer activity in nearby contracts, while helping to create some additional market stability. Overall market intensity has faded from sharp market shifts over the last couple of weeks as traders seem intent on establishing some stability in the complex. Corn prices are lower in light trade. Stock markets are lower, Dow Jones is 147 points lower while Nasdaq is down 25 points.

LIVE CATTLE:

Open: 10 to 60 cents higher. Limited support is slowly trickling into the live cattle complex. There is growing support that additional buyer activity may continue to be seen through the next couple of days. But it is also becoming clearer that aggressive long term buyer activity may be hard to sustain at this point. After June futures have rallied over $2 per cwt above long term market lows, traders seemed to become more comfortable with establishing and holding a sideways pattern. This could allow for back and forth market shifts over the next few days. Cash cattle markets are still undeveloped early Wednesday. Packer interest may start to become more available through the day, although at this point it is likely that the majority of trade may be pushed off until Thursday or Friday. Asking prices are still hard to define at this point, but expected to be at $120 live basis and $190 dressed. Open interest Tuesday added 557 positions (348,645). Spot month April contracts lost 935 positions (17,518) and June contracts fell 314 positions (157,209). DTN projected slaughter for Wednesday is 118,000 head.

FEEDER CATTLE:

Open: 50 cents to $1 higher. Firm support is slowly trickling into the feeder cattle futures as buyers are stepping up to the plate once again. But market intensity remains sluggish as many traders are not willing to move prices significantly in either direction early in the session. There is likely to be some moderate gains holding through most of the morning, although a shift in outside markets or beef fundamentals would have to develop to create sharp market shifts during morning trade. Cash index for 4/9 is listed at $134.81 up 0.32. Open interest Tuesday gained 626 positions (50,602).

LEAN HOGS:

Open: Steady to 40 cents higher. Narrow gains have slowly developed early Wednesday morning in lean hog futures as very few traders have actively moved into the complex. The sluggish market movement has more to do with the lack of clear direction over the last couple of sessions, and traders seemingly comfortable on the sidelines until they can get a better grasp of longer term market sifts. With nearby contract prices rallying over $3 per cwt in the last week, the complex remains planted in a short term sideways pattern. This could allow for lackluster market shifts over the near future, and keep prices in the current trading range. Cash hog trade Wednesday is 50 cents lower to $1 higher. Most bids are expected steady to 50 cents higher. Open interest Tuesday fell 903 positions (240,314). Spot month April fell 1,115 in positions (12,682) and June liquidated 1,348 positions (99,482). Cash lean index for 4/9 is $53.50, down 0.52. DTN projected slaughter for Wednesday is expected to be 467,000 head. Saturday runs are scheduled at 102,000 head.

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

(SK)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.