DTN Before The Bell-Livestock

Cattle Markets Pull Back From Aggressive Early-Week Gains

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

Livestock futures continues to remain firm despite the pressure in cattle trade early Thursday morning. Position taking appears to the main focus of the complex, and could spark additional trade activity later in the day. Corn markets are trading lower in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 5 points lower while Nasdaq is up 12 points.

LIVE CATTLE:

Opening call: 50 to 70 cents lower. Moderate pressure may continue to develop through the complex with traders focusing on increased position taking. The focus on pulling back from the extreme gains may be short lived as bullishness is still seen through the complex. This could spark additional buying activity at the end of the session. Cash cattle markets are quiet early Thursday morning. Bids and asking prices are still undeveloped through the morning, although trade may continue to develop through the week. Strong gains in the Fed cattle exchange is expected to draw additional support to feedlot markets. Open interest Wednesday added 7,559 positions (375,326). Spot April liquidated 4,793 positions (55,248) and June contracts added 6,911 positions (165,077). DTN projected slaughter for Wednesday is 115,000 head.

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FEEDER CATTLE:

Opening call: Steady to 50 cents lower. Light pressure is slowly trickling into the cattle complex with most nearby feeder cattle contracts holding losses of 10 to 20 cents per cwt. The overall lack of support in the complex continues to draw increased market activity despite strong gains over the last two weeks. Cash lean index for 3/20 is $129.95, up $0.25. Open interest Wednesday added 1,060 position (56,248).

LEAN HOGS:

Opening call: Mixed. Narrow trading ranges are seen once again early Thursday morning with the focus on follow through pressure developing. The softness seen in pork values over the last couple of days is also adding to weakness in most nearby contracts. Cash bids are steady to $1 lower with bids scattered through the range. Open interest Wednesday fell 1,044 positions (216,242). Spot month April fell 2,954 positions (33,718) and June added 30 positions (81,166). Cash lean index for 3/17 is $71.48, down $0.13. DTN projected slaughter for Thursday is 440,000 head. Saturday runs are expected at 135,000 head.

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

(SK)

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Rick Kment