DTN Before The Bell-Livestock

Sluggish Market Activity Pulls Livestock Trade Lower

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Extremely light trade is seen Friday morning with St. Patty's Day and basketball games fiercely competing for attention following the wide-ranging market shifts earlier in the week. Trade is likely to remain sluggish with very little new market direction expected to be seen during the end of the week. This could keep traders focused on position squaring activities through much of the session. Corn markets are trading lower in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 34 points higher while Nasdaq is up 5 points.

LIVE CATTLE:

Opening call: Steady to 20 cents lower. Narrow trading ranges are seen early Friday morning across the entire live cattle complex. The ability to spark additional interest back into the market may bring some additional support to the trade if added cash sales are reported or beef values show significant support later in the session. April futures are leading the market lower, but the inability to bring active trade into the market at the end of the week could limit overall market direction Friday. Cash cattle markets are likely to have the tone set for the week, but there are a few bids developing in the North as packers try to gain additional access to cattle at the higher money. Bids are seen at $130 to $131 live basis, and $210 dressed. Trade in the South appears to be finished for the week, but it will be uncertain just how much activity will develop yet in the North. Open interest Thursday added 6,150 positions (356,688). Spot April liquidated 2,902 positions (71,345) and June contracts added 4,472 positions (143,204). DTN projected slaughter for Friday is 108,000 head.

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FEEDER CATTLE:

Opening call: Mixed. Mixed trade within a very narrow range is appearing to be able to hold market activity to a minimum. Trade volume is expected to remain incredibly weak with the celebration of St. Patty's Day also lending toward the lack of interest in the market. Sharp gains through the week has left the market looking for light position taking. The narrow losses of 5 to 10 cents per cwt during early trade appear to be focused on squaring positions at the end of the week. Cash lean index for 3/14 is $127.61, up $0.19. Open interest Thursday added 1,176 position (51,341).

LEAN HOGS:

Opening call: Steady to 50 cents lower. Light pressure is once again seen in lean hog futures with moderate softness developing in nearby contracts. April through June futures are holding losses of 50 to 60 cents per cwt in light trade, as traders remain uncertain given the narrow market shifts seen Thursday. It appears that with cash markets appearing to soften slightly at the end of the week, traders are willing to still chop around in the sideways range bound levels seen over the past several weeks. This could bring additional market shifts through the end of the month, although very little information is available to the complex at this time. Cash bids are steady to $1 lower with most bids steady to 50 cents lower. Open interest Thursday gained 1,246 positions (218,076). Spot month April fell 1,204 positions (41,079) and June added 1,915 positions (79,287). Cash lean index for 3/14 is $71.99, up $0.05. DTN projected slaughter for Friday is 427,000 head. Saturday runs are expected at 146,000 head.

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

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Rick Kment