DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are mixed to higher with all nearby contracts holding light to moderate gains. The potential to cover short positions following the market pullback on Thursday is bringing additional commercial interest back into the complex. Corn markets are trading lower in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 7 points higher while Nasdaq is down 2 points.

LIVE CATTLE:

Opening call: Steady to 50 cents higher. Early trade is starting to bring some underlying support back into the complex. There may be some additional support developing across the complex, although there remains questions about just how much volume will develop through morning trade. The focus on cash market development later in the day could help to set the underlying tone of the live cattle market during the morning. Light volume could actually spark increased market price shifts during late week trade, but overall consistency remains uncertain. Cash cattle activity still remains quiet with bids not redeveloping at this point in the morning. Asking prices are expected to remain at $122 in the South and $190 and higher in the North. Trade will develop at some point during the day, although there may be uncertainty as to just how much activity will develop. Open interest Thursday fell 1,247 positions (324,902). Spot February liquidated 1,311 positions (9,262) and April contracts fell 1,177 positions (132,402). DTN projected slaughter for Friday is 113,000 head.

FEEDER CATTLE:

Opening call: Mixed. Nearby support early Friday morning is being tempered by the overall lack of buyer activity and firm market interest seen in deferred contracts. Feeder cattle futures remain 20 to 30 cents higher during initial trade Friday morning, but the overall firmness in the market is skewed to spring contract months due to growing uncertainty about future feeder cattle placements and long term beef demand. Cash lean index for 2/15 is $128.02, down $0.05. Open interest Wednesday added 58 position (50,830).

LEAN HOGS:

Opening call: Mixed. Moderate buyer support continues to draw nearby prices higher early Friday as traders continue to focus on the potential for firming cash market activity and the ability that pork values may see firm gains through the end of the week. Nearby contracts are likely to hold gains of 20 to 40 cents per cwt during most of early trade, while deferred contracts remain much less aggressive with the lack of buyer support seen in late 2017 and early 2018 contract months. Cash bids are 50 cents lower to 50 cents higher with most bids steady to 50 cents higher. Open interest Thursday liquidated 6,199 positions (233,345). Spot month February fell 6,792 positions (5,430) and April fell 1,707 positions (100,564). Cash lean index for 2/15 is $75.98, up $0.67. DTN projected slaughter for Friday is 438,000 head. Saturday's runs are expected to be 215,000 head.

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

(SK)

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