DTN Before The Bell-Livestock

GENERAL COMMENTS

Light to moderate pressure has continued to develop across the livestock complex. This could push prices lower through the end of the week. Corn markets are trading lower in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 2 points higher while Nasdaq is down 4 points.

LIVE CATTLE:

Opening call: 30 to 50 cents higher. Light to moderate pressure quickly developed through the live cattle market early Friday morning. The sharp losses seen in the complex Thursday has limited additional buyer support in the complex. There is expected to still be a lot of focus on the afternoon release of the cattle on feed report, and additional cash trade developing through the week. But this may not be enough to draw support back into the complex. Cash cattle markets is starting to show a few bids Friday morning following light to moderate trade Thursday. Bids are seen at $120 live and $193 dressed, but moderately under Thursday's sales. Open interest Thursday added 950 positions (351,916). Spot February liquidated 2,979 positions (45,022) and April contracts added 1,620 positions (149,034). DTN projected slaughter for Friday is 114,000 head.

FEEDER CATTLE:

Opening call: 50 to 80 cents lower. Follow-through pressure is seen in feeder cattle futures as the market continues to draw liquidation back into the market. The triple-digit losses seen Thursday are leading to additional uncertainty when it comes to the overall lack of buyer support in all livestock markets. Cash lean index for 1/20 is $133.46, up $0.18. Open interest Thursday fell 435 position (52,888).

LEAN HOGS:

Opening call: Mixed. The ability to try to bring some stability to the lean hog futures complex through the end of the week is being met with limited success. Light gains are holding in nearby contracts, while pressure is seen through the rest of the market. The sharp triple digit losses seen Thursday is creating additional uncertainty surrounding buyer activity and overall long term trade activity seen in several of the trading partners. Cash bids are steady to $0.50 higher with most bids. Open interest Thursday lost 4,463 positions (215,887). Spot month February liquidated 1,484 positions (26,634) and April fell 3,039 positions (92,387). Cash lean index for 1/20 is $67.03, up $0.02. DTN projected slaughter for Friday is 440,000 head. Saturday's run is expected to be 201,000 head.

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

(SK)

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