DTN Midday Livestock Comments
Expected Early Buying Could Fade by the Close
Live Cattle:
Live cattle contracts were holding on to small gains at midday with the April up $0.35 and June rallying $0.325. As noted before, trade volume was light with spreads showing possible commercial interest through the early part of the day. As discussed in Before the Bell, the market remains vulnerable to a round of noncommercial selling to close out the week given the continued short-term downtrend on its daily charts.
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Feeder Cattle:
Despite low volume trade, or maybe because of it, feeder cattle contracts were showing decent gains at midday. March was up $0.75, April was $0.60 higher, and May was showing a gain of $0.55. Action in these spreads would indicate the market has been supported by commercial buying early Friday, though low volume can skew spreads. As with live cattle the minor (short-term) trends on daily charts remains down, leaving the market vulnerable to a round of selling heading into the weekend.
Lean Hogs:
As expected, lean hogs turned lower mid-morning following a small rally to start the day. Commercial traders who were buyers through the early part of the week look to have stepped out of the market ahead of the weekend or have turned sellers. The April contract is off $0.35, while the May is losing $0.10 and the June is down $0.075. As stated in Before the Bell, the April contract is threatening a possible bearish turn on its weekly chart if selling gains momentum through the latter half of the day.
DTN Senior Analyst Darin Newsom can be reached at darin.newsom@dtn.com
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