DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are mixed early Friday morning as prices are shifting within a moderate trading range. Firm follow through support in cattle trade has continued to draw additional buyer support back into nearby and deferred contract months. Pressure is seen once again in lean hog futures, although the tone of the market remains sluggish Friday morning. Corn markets are trading lower in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 49 points higher while Nasdaq is up 20 points.

LIVE CATTLE:

Opening call: Steady to 60 cents per cwt higher. Live cattle futures continue to hold moderate to firm buyer support Friday morning. The ability to sustain light to moderate gains Thursday is helping to spark follow through buyer interest at the end of the week. The main question at this point is if there continues to be enough market depth to keep buyers active through the rest of the trading session. A break above February highs of $17.92 per cwt would likely bring about additional commercial interest into the market through the end of the week and into the middle of March. Cash cattle trade is expected to remain quiet through the day Friday with most if not all trade needed to be done already accomplished for the week. A little additional clean up trade is still possible, but the tone of the market has been set. Open interest Thursday gained 321 positions (338,145). Spot April liquidated 8,301 positions (90,230) and June contracts added 5,288 positions (120,003). DTN projected slaughter for Friday is 110,000 head.

FEEDER CATTLE:

Opening call: Steady to 40 cents higher. Follow through buyer interest is slowly developing Friday morning following the strong triple digit rally seen across feeder cattle trade Thursday. March contracts are holding a 40 cent gain in the early minutes of trade, which is helping to spark additional underlying support through the entire complex. The firm support developing in live cattle futures could bring about additional support which could solidify end-of-week buying activity through the entire cattle complex. Cash lean index for 3/8 is $127.00, up $0.05. Open interest Thursday added 249 position (49,922).

LEAN HOGS:

Opening call: Steady to 50 cents lower. Light to moderate pressure has redeveloped in lean hog futures trade with traders focusing on the overall lack of buyer support seen over the last two trading sessions. Trade volume is expected to remain extremely light through both nearby and deferred contracts, with traders still focusing on the softness in cash hog markets and inability to spark additional trade activity from commercial traders at the end of the week. Price ranges are expected to hover between 30 and 40 cents per cwt lower with additional uncertainty seen as the remainder of March develops. Cash bids are steady to $1 lower with most bids steady to 50 cents lower. Open interest Thursday added 1,034 positions (214,735). Spot month April fell 4,651 positions (55,191) and June added 3,631 positions (69,755). Cash lean index for 3/8 is $72.59, down $0.01. DTN projected slaughter for Friday is 436,000 head, with 125,000 expected Saturday.

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

(SK)

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