DTN Before The Bell-Livestock

Cattle Trade Surges Higher Following Feeder Cattle Gains

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Moderate to strong buyer support is moving into the livestock market with traders focused on strong early-day gains holding in cattle trade. This could bring about even more support from outside traders that are willing to move back into the livestock 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: 20 to 90 cents higher. Firm gains are seen in nearby live cattle futures as early morning buyer activity has moved into the market. The choppy and unsettled nature of trade midweek seems to be bringing a sense of renewed market support to the complex Thursday. This may add even more volatility to the market with traders looking for direction in beef market fundamentals, as well as being able to show technical support through the week. Cash cattle activity is expected to become more active through the day with packers likely to float additional bids in similar ranges as seen Wednesday. The very light trade that was seen in the South posted sales at $114 to $117 per cwt, although it is hard to tell if a market tone could be established by this amount of trade. This trade also includes the Fed Cattle Auction trade. At this point active trade could easily be pushed off until late Thursday or sometime Friday as neither side seems to be in a rush to ink deals at these prices. Asking prices are still holding around $120 live basis and $190 dressed. Open interest Wednesday fell 1,687 positions (346,829). Spot month April contracts lost 1,205 positions (16,313) and June contracts fell 1,332 positions (155,822). DTN projected slaughter for Thursday is 117,000 head.

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FEEDER CATTLE:

Open: $1 to $1.50 higher. Buyers have sprinted out of the gate early Thursday morning with aggressive activity developing in the opening minutes of trade. This may add some additional momentum to the market. It is uncertain at this point just how much buyer activity will continue to develop, or if prices will continue to be supported through the rest of the morning. Cash index for 4/10 is listed at $134.85 up 0.04. Open interest Wednesday gained 539 positions (51,088).

LEAN HOGS:

Open: Steady to 45 cents higher. Light support is moving into lean hog futures trade with buyers focusing on strong triple-digit support in other livestock markets. This is helping to build an underlying tone in the complex as front month April futures are holding 45 cent gains. The spot April contract is still trading at a $23 per cwt discount to the June futures complex as traders look for summer demand and light to moderate changes in supply to spark additional market shifts. Cash hog trade Thursday is steady to $2 higher. Most bids are expected $1 higher. Open interest Wednesday added 157 positions (240,617). Spot month April fell 406 in positions (12,456) and June liquidated 1,748 positions (97,705). Cash lean index for 4/10 is $53.02, down 0.48. DTN projected slaughter for Thursday is expected to be 467,000 head. Saturday runs are scheduled at 111,000 head.

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

(SK)

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Rick Kment