DTN Before The Bell-Livestock

Mixed Livestock Trade Developing Friday Morning

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

Mixed trade is seen in all livestock trade with extremely light trade volume seen through all markets at this point during the morning. This is likely to limit overall activity during the morning, but may spark additional interest through the rest of the session. Corn markets are trading lower in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 9 points lower while Nasdaq is up 9 points.

LIVE CATTLE:

Opening call: Mixed. Mixed trade is seen in live cattle futures. Nearby gains are developing with the expiring April live cattle futures holding a strong triple digit gain, currently $2.30 per cwt higher. While the rest of the market remains mixed in a narrow range. Deferred futures which were locked in daily trading limits Thursday are taking positions early in the session. But this could quickly cause markets to swing in either direction later through the trading session. With this being the last trading session of the month of April, market adjustments are likely to be seem over the next several hours as traders adjust positions. Cash cattle activity is expected to remain sluggish early Friday morning following active trade Thursday. Sharply higher prices quickly developed in most areas during the day Thursday, which may cause business to be done in many areas for the week. Bids may redevelop later in the day, as asking prices on cattle left over likely to be seen at $140 in the South and $220 and higher. Open interest Thursday added 5,496 positions (425,317). Spot April liquidated 1,409 positions (362) and June contracts added 14 positions (182,978). DTN projected slaughter for Friday is 109,000 head.

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FEEDER CATTLE:

Opening call: Mixed. Nearby feeder cattle futures are building on the recent contract highs seen Thursday afternoon as markets open Friday. Although narrow trade ranges have developed during the first few minutes of trade. Expanded trading limits are in place following daily trading limits seen Thursday, although at this point it would be safe to say traders seem to remain lethargic at the end of the week. This could quickly change as additional volume steps into the market. Cash lean index for 4/25 is $139.44, up 0.13. Open interest Thursday added 607 position (60,973).

LEAN HOGS:

Opening call: Mixed. Mixed trade is seen early Friday morning as traders are taking a breather following the aggressive market surge following the aggressive triple-digit rally Thursday. The momentum continues to develop in the market, although volume may remain sluggish through most of the morning as end of the week and month positioning is expected to be taking place. May futures are holding light 22 cent losses in the opening minutes of trade, while the rest of the complex is holding 5 to 50 cent gains as follow through buyer support continues to add to the technical buyer support building on the sustained market momentum seen through the end of April. Cash bids are steady to $1 higher with most bids 50 cents to $1 higher. Open interest Thursday added 1,275 positions (219,145). Spot month May added 62 positions (2,073) and June fell 1,154 positions (81,155). Cash lean index for 4/25 is $59.93, down $0.23. DTN projected slaughter for Friday is 434,000 head. Projections for Saturday runs are expected to be 103,000 head.

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

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Rick Kment