DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures remain extremely lightly traded in a very narrow trading range with mixed trade seen across the complex. The overall lack of direction seen across the complex is giving the market a very uneasy sense to the market given the pressure seen early in the week. Corn markets are trading lower in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 26 points higher while Nasdaq is up 10 points.

LIVE CATTLE:

Opening call: Steady to 30 cents lower. Narrow market pressure is slowly working back into the market following the sluggish market gains which developed just before closing bell Wednesday afternoon. The lackluster market movement seen in the entire livestock market Thursday is a continuation of the late Wednesday market activity seen after the first half of the week was marked by aggressive losses. With traders seemingly content with the level of liquidation in the market at this point, most markets have remained at a near standstill through the morning with prices trading within a very narrow trading range as most traders remain on the sidelines. Cash cattle activity remains quiet early Thursday morning with bids quiet at this point. It is expected that additional interest will develop later through the day, but may be delayed until sometime Friday. There are questions as to just how much trade will need to be developed through the week, if packers can stretch out supplies until next week. This would likely be more of a matter of principle than anything else at this point, with the expectation that futures may continue to erode in the near future. Asking prices remain at $128 to $130 during early morning in the South with prices at $205 in the North. Asking prices are likely to hold at $130 in the South and $210 in the North until late in the week unless a major upset is seen in futures trade. Open interest Wednesday added positions (391,839). Spot April liquidated 1,186 positions (30,202) and June contracts fell 214 positions (184,344). DTN projected slaughter for Thursday is 111,000 head.

FEEDER CATTLE:

Opening call: Steady to 20 cents lower. Narrow losses are slowly stepping into feeder cattle futures trade Thursday morning following the mixed market moves seen midweek. The lack of direction in the market at this point is unable to bring traders to a point to move in significantly one way or another. Trade volume is expected to remain sluggish through most of the morning with very little activity likely to be seen through the rest of the week. Cash lean index for 4/4 is $133.13, down 0.27. Open interest Wednesday fell 391 positions (57,500).

LEAN HOGS:

Opening call: Steady to 30 cents higher. Narrow gains have trickled into nearby lean hog futures early Thursday morning as market stability appears to have slowly developed across the lean hog futures complex. This has helped to bring 10 to 20 cent gains into April to June contracts with the potential to bring additional buyer support into not only cash hog prices through the end of the week, but also additional buyer activity into pork values ahead of the Easter holiday weekend. Even though trade volume remains light, a higher close in the hog complex Tuesday would help to draw additional buyer support back into the market and sustain additional support through nearby trade. Cash bids are expected to be seen steady to $1 per cwt lower with most bids steady to 50 cents lower. Open interest Wednesday fell 1,079 positions (202,774). Spot month April fell 1,523 positions (14,883) and June gained 838 positions (82,884). Cash lean index for 4/4 is $66.60, down $0.47. DTN projected slaughter for Thursday is 442,000 head. Saturday runs are expected at 89,000 head.

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

(SK)

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