DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures have turned lower in most contracts early Thursday morning. The pressure in cattle trade still remains light, but is setting the tone for most contract months during the first few minutes of trade. Corn prices are mixed in light trade. Stock markets are higher, Dow Jones is 82 points higher while Nasdaq is up 26 points.

LIVE CATTLE:

Open: 10 to 40 cents lower. Limited activity is seen across the live cattle futures market with narrow pressure seen in all nearby contracts. Traders continue to focus on the potential to add cash market activity to the market, although the concern seen following the recent pullback in spot-month trade could add some late week weakness to the entire complex. Trade volume is expected to remain sluggish through most of the morning with traders not only paying attention to market fundamentals, but also closely following outside market direction. Cash cattle activity is expected to increase through the day with bids likely to become more evident during the morning. Light trade trickled into parts of the North Wednesday with prices seen from $119 to $121 per cwt. Although this limited activity is not enough to establish a trend, it may create the tone of how cash business may develop through the week with most trade possible in dribble and drabs over the next couple of days. Open interest Wednesday fell 857 positions (359,673). Spot month June contracts lost 12,850 positions (104,431) and August contracts gained 9,061 positions (127,761). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: 30 to 90 cents lower. Seller pressure is slowly developing early Thursday morning with increased weakness seen through late trade on Wednesday. The underlying support in the market early in the month seems to be extremely limited as traders remain focused on overall long-term supply support and questions as to just how much additional demand will be seen in order to push prices higher. Cash index for 5/8 is listed at $138.00 up 0.09. Open interest Wednesday added 344 positions (44,764).

LEAN HOGS:

Open: Mixed. Early trade is hovering in single digit price ranges in either direction as traders seem content with the current trading range for the moment, but unwilling to show aggressive trade activity during the Thursday morning session. May futures are holding narrow gains, while other nearby summer contracts are shifting slightly lower. The recent moves in pork fundamentals and continued support of moving pork product through the upcoming months may help to add some needed stability to the futures complex. Cash hog trade Thursday are steady to $1 per cwt higher. Most bids are steady to 50 cents higher. Open interest Wednesday lost 7,897 positions (240,741). Spot month May fell 203 positions (2,031) and June fell 8,253 positions (70,090). Cash lean index for 5/8 is $63.55, up 0.22. DTN projected slaughter for Thursday is expected to be 465,000 head. Saturday runs are estimated at 43,000 head.

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

(SK)

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