DTN Before The Bell-Livestock

GENERAL COMMENTS

Limited market direction has developed Wednesday with prices mixed in cattle trade and moderately lower in hog futures. This overall lack of aggressive interest may cause prices to hover in a narrow range through most of the session. Corn markets are lower in light early trade. Stock markets are lower. Dow Jones is 19 points lower with Nasdaq down 12 points.

LIVE CATTLE:

Open: Mixed. Light trade has redeveloped Wednesday morning as follow-through buyer support is slowly trickling into nearby contracts. The underlying support seen in April futures Tuesday is helping to bring stability to market prices with a potential push higher seen through the Wednesday session. Traders continue to focus on the ability to actively move beef product in domestic and export markets with recent reports showing expectations of Japan demand growing through 2019. This may add some stability to the market over the next few weeks. Cash cattle remain undeveloped with asking prices and bids still hard to pin down. Packer interest is expected to improve over the next couple of days, although trade may not be seen until late Friday. Open interest Tuesday added 1,448 positions (424,228). Spot month April contracts lost 3,418 positions (145,083) and June contracts added 2,595 positions (143,138). DTN projected slaughter for Wednesday is 116,000 head.

FEEDER CATTLE:

Open: Mixed. Limited activity is seen through the entire feeder cattle trade Wednesday with nearby gains offset by narrow to moderate losses in deferred contracts. Early analyst estimates of cattle placements through January is helping to support nearby trade, although the rest of the complex remains sluggish based on live cattle market softness. Cash index for 3/4 is $139.63 up $0.04. Open interest Tuesday gained 189 positions (55,360).

LEAN HOGS:

Open: Steady to $0.60 lower. Limited pressure is seen through nearby lean hog futures with April futures leading the market lower as traders are retracting a portion of the strong gains over the last several days. The tone of the market still remains steady to firm with trader quickly moving higher. This pace of market support is likely to bring about market adjustments, and at this point, this is what is going on. But there still remains concern through the complex as fundamentals have not changed, leaving the complex uncertain as to how much strength can develop. Growing uncertainties of a trade deal with China and what any such deal will look like is causing some additional market pressure early Wednesday. Cash hog trade is steady to 50 cents lower. Most bids are steady. Open interest gained 243 positions (261,164). April fell 1,740 positions (97,911) and June added 1,108 positions (52,372). Cash lean index for 3/04 is $51.94 up $0.01. DTN projected slaughter for Wednesday is 477,000 head. Saturday runs are expected at 189,000 head.

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

(BAS)

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