DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm pressure is quickly moving into cattle and hog futures following initially mixed opening trade. The lack of follow-through support seen in the complex as traders returned from the long Easter weekend continues to add even more uncertainty to all markets, although feeder cattle trade is taking the brunt of morning pressure. Corn markets are lower in light early trade. Stock markets are lower. Dow Jones is 54 points lower with Nasdaq down 11 points.

LIVE CATTLE:

Open: Mixed. Early trade remains mixed to mostly lower as traders are looking past higher cash prices last week and focusing on the growing supply of cattle in feed yards reported in Thursday's cattle on feed report. Soon to expire April futures are holding limited gains, while the rest of the complex is 40 to 60 cents lower during early trade. The focus on growing summer demand is being offset by the potential that even more beef will be available to the market through the end of the summer and early fall months. Cash cattle activity remains sluggish with show list distribution and inventory taking the main priority through the day. Open interest Thursday gained 1,851 positions (450,212). Spot month April contracts lost 1,806 positions (7,953) and June contracts slipped 1,226 positions (194,019). DTN projected slaughter for Monday is 118,000 head.

FEEDER CATTLE:

Open: 50 cents to $1 lower. Moderate to strong pressure has quickly moved through feeder cattle trade Monday morning. The Thursday release of April 1st cattle on feed report posted larger than expected placements. This is causing traders to pull back from the complex, especially in fall contract months as this may add even more softness to the overall complex during late 2019. Grain markets are shifting lower, in early Monday trade, although this is not able to overshadow the growing supply of cattle moving through the system. Cash index for 4/17 is $144.98 up $1.40. Open interest Thursday added 1,229 positions (56,183).

LEAN HOGS:

Open: Mixed. Nearby May futures continue to hold light to moderate support in early Monday trade, although limited pressure is seen through the rest of the complex. There is growing uncertainty as to just how much short term buying may continue through the complex following late week pressure. Even with added export sales reported last week, the market continues to be disappointed with the amount of product moving, and prices at the higher levels are starting to weaken. The expectation is that strong domestic and export demand will continue, but the biggest question is if this will be enough to sustain previous market support over the next couple of months. Cash hog trade is called steady to $1 higher. Bids are scattered within the range. Open interest added 2,669 positions (302,370). June fell 943 positions (80,200) and July added 805 positions (37,148). Cash lean index for 4/18 is $81.02 up $0.45. DTN projected slaughter for Monday is 334,000 head.

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

(BAS)

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