DTN Before The Bell-Livestock

GENERAL COMMENTS

Feedlot country remains in slow gear this morning with just a few bids scattered across the area (i.e., $117 in Texas; $188 dressed in Nebraska). Some sections still need to trade more stock before calling it a week. Asking prices are around $120 live in the South and $190 dressed in the North. Hog buyers are generally working with bids this morning steady to 0.50 lower compared with yesterday. Corn futures are trading 2-3 cents higher through the opening hour. Supported by more jobs added in July than anticipated (i.e., 209.000 vs trade expectations of close to 183,000), the stock market is higher in the early rounds with the Dow up 26 points and the Nasdaq stronger by 4.

LIVE CATTLE:

Live contracts are generally 22 to 80 lower through the initial hour of business, pressured by long liquidation and late-week short covering. Despite evidence of steady/firm feedlot sales this week, spot August remains reluctance to move toward cash premiums.

Specs and commercials still seem quite leery of third quarter fundamentals. Open interest on Thursday decreased by 3,300 (346,922).

Spot August liquidated by 3,517 (32,163) and October lost 485 (176,307). DTN projected slaughter for today is 114,000 head. The Saturday slaughter should be close to 47,000 head.

FEEDER CATTLE:

Feeder issues are also under pressure this morning with some far deferred contracts slumping to the tune of triple digits.

Open interest on Thursday increased by 58 (59,218). CME cash feeder index for 08/02: 150.87, up .44.

LEAN HOGS:

Lean hog contracts are moderately higher at this time, supported by short covering and the premium status of the cash index.

Though more than $25 under spot cash, the December contracts has at least been successful in attracting buying interest under 60 this week. Open interest on Thursday decreased by 3,431 (258,522). Spot August liquidated by 3,568 (19,532) and October declined by 706 (114,603). Cash lean index 08/02: 87.11, off .24. DTN projected slaughter for today is 420,000 head. Look for Saturday's kill to be right at 77,000 head.

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

(SK)

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