DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are trading generally lower in light trade with the overall lack of buyer support likely to put additional pressure on the entire complex. Lighter packer activity is expected to be seen which may slightly disrupt cash markets through the end of the week. Corn markets are trading lower in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 13 points down while Nasdaq is down 2 points.

LIVE CATTLE:

Opening call: Steady to 50 cents lower. Firm pressure is developing across the complex with narrow moves seen in the complex as traders are looking at the most aggressive pressure in the last half of 2017. Trade volume is expected to remain sluggish through most of the morning, although the inability to spark additional trade volume through the first couple hours of trade may limit market consistency through the end of the week. Cash cattle markets remain quiet with bids undeveloped at this point. Trade is likely to be pushed off until Friday at this point. Open interest Wednesday fell 1,357 positions (326,157). Spot February liquidated 1,047 positions (10,573) and April contracts fell 2,160 positions (133,579). DTN projected slaughter for Thursday is 102,000 head.

FEEDER CATTLE:

Opening call: Steady to 80 cents lower. Strong pressure is developing in feeder cattle futures Thursday morning with the main focus in trade based on the lack of underlying support in live cattle futures. Traders may see additional pressure through the morning as concerns of additional firming feeder cattle supplies loom over the market over the coming weeks. Cash lean index for 2/13 is $128.46, up $0.05. Open interest Wednesday fell 440 position (50,772).

LEAN HOGS:

Opening call: Steady to 30 cents lower. Light to moderate price pressure is developing across the entire livestock market with lean hog futures holding markets under light pressure. There is expected to be additional pressure through the morning as uncertainty surrounding overall pork movement may create additional softness through the rest of the week. The lack of support above $70 per cwt in front month contracts tends to be tied to buyer activity stalling out following support early in the month. Cash bids are 50 cents lower to 50 cents higher with most bids steady to 50 cents higher. Open interest Thursday added 2,084 positions (239,550). Spot month February remained unchanged (12,222) and April fell 518 positions (102,270). Cash lean index for 2/13 is $74.62, up $0.51. DTN projected slaughter for Thursday is 412,000 head. Saturday's runs are expected to be 203,000 head.

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

(SK)

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