DTN Before The Bell-Livestock

Light Pressure Develops in Livestock Trade Early Thursday

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

Livestock futures are trading mostly lower in extremely light trade early Thursday morning as the overall lack of activity in the complex is a function of undeveloped cash market activity and sluggish outside market movements. There continues to be very little movement in surrounding markets, which is keeping many traders watching and waiting for other traders to make the first move. Corn markets are trading lower in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 2 points lower while Nasdaq is up 6 points.

LIVE CATTLE:

Opening call: Steady to 50 cents lower. Narrow losses have developed in live cattle futures early Thursday morning as traders have backed away from the midweek buyer support that stepped back into the complex. Traders are also looking for end-of-the-week cash market trade activity, which may not be as aggressive as previously thought. This could bring about some pressure to the futures trade also. April live cattle futures are leading the complex lower during early trade, but with limited market activity, as traders are not only focusing on fundamental trade activity but also looking for direction from outside market direction for increased focus. Cash cattle bids are starting to develop early Thursday morning with Southern prices seen at $126 per cwt. Trade could still be delayed until sometime late Thursday or Friday, but at least it is a start after a sluggish start for the week. Asking prices are around $132 in the South and $215 in the North. And expected to hold at that level through most of the morning. Open interest Wednesday added 2,230 positions (390,635). Spot April liquidated 1,752 positions (40,012) and June contracts added 2,157 positions (182,086). DTN projected slaughter for Thursday is 115,000 head.

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FEEDER CATTLE:

Opening call: 50 cents to $1 lower. Moderate pressure has moved into cattle futures early Thursday morning as traders have backed away from the recent push higher seen midweek in both live and feeder complex trade. This could be only a market correction, but traders are becoming somewhat cautious just in case it is much more of a longer-term market shift in trend and could create a longer change in trader activity as April begins next week. Trade volume is expected to remain light through most of the session, which could leave markets in a light to moderate range through most of the day. Cash lean index for 3/28 is $133.26, unchanged. Open interest Wednesday added 906 position (58,677).

LEAN HOGS:

Opening call: Mixed. Lackluster trade activity is expected to be seen through the lean hog markets through most of the morning with very little interest shown during the morning. More emphasis is going to be placed on the downside pressure put on the market over the next couple of weeks and the overall focus on the hogs and pigs report which will be released today. April lean hog futures are leading nearby contracts lower, and may continue to put pressure on the complex with prices under $65 per cwt through the morning. Cash bids are steady to $1 lower with bids scattered through the range. Open interest Wednesday fell 774 positions (204,677). Spot month April fell 1,159 positions (21,118) and June added 351 positions (79,682). Cash lean index for 3/27 is $69.40, down $0.38. DTN projected slaughter for Thursday is 440,000 head. Saturday runs are expected to be at 142,000 head.

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

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Rick Kment