DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm gains have quickly and steadily moved into lean hog trade through initial market activity. This is helping to spark some renewed trade interest through the entire hog complex during late April. Cattle markets are mixed to mostly lower with very sluggish activity seen in the live cattle complex. Corn markets are lower in light early trade. Stock markets are lower. Dow Jones is 28 points lower with Nasdaq down 45 points.

LIVE CATTLE:

Open: Mixed. Limited interest is seen in live cattle futures with soon to expire April futures are holding moderate to firm gains, while the rest of the complex is holding very narrow losses. The overall tone of live cattle markets is starting to stabilize early in the week. Expected trade volume and overall movement of the complex could remain sluggish on the last day of April. Cash cattle activity remains quiet, although it is expected a few asking prices may slowly start to develop in some areas by the end of the day. Bids are not expected through the day, but may start to be seen midweek. There is more focus on the potential for midweek trade Wednesday given that trade developed in the South on Wednesday over the last few weeks. Open interest Monday liquidated 4,513 positions (420,682). Spot month April contracts lost 582 positions (277) and June contracts slipped 5,267 positions (164,411). DTN projected slaughter for Tuesday is 119,000 head.

FEEDER CATTLE:

Open: Mixed. Initial feeder cattle trade is mixed to mostly lower with spill over pressure from strong triple digit losses Monday keeping traders bearish. The shift lower in all contracts has added to the growing uncertainty about renewed buyer activity based on current feed prices and overall seasonal beef demand. Traders remain concerned about the growing feeder cattle supply that is expected to continue through the spring and summer. This may add increased price pressure over the near future, as prices move further away from recent market highs seen in April. Trade talks with Japan continue to add uncertainty to the market due to the impact on beef exports any potential tariffs would have. Cash index for 4/26 is $145.19 up $0.95. Open interest Monday fell 1,480 positions (50,073).

LEAN HOGS:

Open: $1 to $2 higher. Initial support is slowly but steadily moving back into lean hog futures during opening trade Tuesday. The aggressive market pressure seen over the last week has quickly liquidated the lightly committed traders who had jumped into the complex through the last several weeks. Following this clearing of bandwagon positions, it is likely that traders will now focus on a more stable market structure based on more realistic demand expectations, as less emotional shifts may limit renewed gains. This could help to build a more solid base as traders continue to look to China to purchase pork, but still expect variable interest through most of the year. Cash hog trade is called steady to $1 lower with bids scattered through the range. Open interest added 3,024 positions (318,615). June added 1,614 positions (82,129) and July gained 1,601 positions (45,144). Cash lean index for 4/26 is $83.46 down $0.27. DTN projected slaughter for Tuesday is 475,000 head. Saturday runs are expected near 32,000 head.

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

(BAS)

Copyright 2019 DTN/The Progressive Farmer. All rights reserved.