DTN Before The Bell-Livestock

GENERAL COMMENTS

Lean hog issues are mixed with trading sentiment torn between lackluster fundamentals and spillover bullisness from the cattle complex.

The cash cattle trade is very quiet this morning following Wednesday's decent trade volume. It will be important to check Mandatory totals later this morning, but right now we're guessing that the lion's share of cash biz could already be done for the week. Steers and heifers still left on showlists are no doubt prices near the top of yesterday's full advance (e.g., $132-plus in the South; $212-plus in the North). Hog buyers have resumed procurement chores this morning with generally steady bids. Corn futures several cents higher at this call, perhaps supported a bit wet forecasts and possible planting delays. The stock market is higher in the early rounds with the Dow up 24 and the Nasdaq better by 17.

LIVE CATTLE:

New contract highs are evident through the live complex this morning with gains ranging from 70 to 210. Short covering, bull spreading, and ongoing cash strength continue to be the main bullish engines here. Open interest on Wednesday decreased by 1,076 (408,021).

Spot April liquidated by 3,149 (8,900) and June lost 506 (188,035).

DTN projected slaughter for today is 115,000 head.

FEEDER CATTLE:

Feeder futures are also exploding in the early rounds as traders logically follow the bullish lead of the live trade.

Needless to say, the more feedlots make, the more they have to spend.

Feeder futures typically represent one of their most favorite watering hole in that regard. Open interest on Wednesday increased by 465 (60,648). CME cash feeder Index for 04/18: 136.64, up .03.

LEAN HOGS:

Lean hog contracts are mixed as we move toward the end of the first hour of trading. It's hard to be inspired by runaway cattle futures when lean charts look this tough and fundamentals remain securely on the bearish side. Open interest on Wednesday decreased by 2,659 (212,123). Spot May added 5 (1,668) and June grew by 279 (87,929). Cash lean index 04/18: 61.89, off .23. DTN projected slaughter for today is 444,000 head.

John A. Harrington can be reached at john.harrington@dtn.com

(SK)

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