DTN Before The Bell-Livestock

Cattle Futures Stage Moderate Rebound Through Opening Hour

(DTN photo by Nick Scalise)
GENERAL COMMENTS

Feedlot country is dead quiet this morning with the cash cattle essentially done for the week. The balance of showlists seems to be priced around $116 in the South and $185-186 in the North. Hog buyers are working with bids ranging from steady to $1 lower this morning. Corn futures are several cents higher through the early rounds thanks to late week short covering. Wall Street is higher in the early rounds with the Dow up 55 points and the Nasdaq better by 32.

LIVE CATTLE:

Live contracts are trying to climb off the mat this morning in the wake of yesterday's bearish mugging. So far, gains are no more than moderate (i.e., up 20-52), constituting little more than a dead cat bounce and certainly suggesting nothing of technical significance in terms of a recovery. Open interest on Thursday decreased by 4,379 (315,178). Spot August liquidated by 1,455 (11,971) and October lost 3,574 (162,591). DTN projected slaughter for today is 117,000 head. Saturday's cattle is expected to be around 52,000 head.

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FEEDER CATTLE:

Feeders are narrowly mixed through the opening hour of business. The trade is slow with a cautious combination of follow-through selling and profit taking. Open interest on Thursday decreased by 643 (59,041). CME cash feeder index for 08/09: 147.93, off 1.55.

LEAN HOGS:

Lean hog futures are moderately higher as we move toward midmorning. Front contracts continue to be carefully supported by commercial and specs who seem to be wondering if extreme discounts are truly justified vis-Ă -vis supply and demand potential threw the last third of 2017. Open interest on Thursday decreased by 1,189 (255,435).

Spot August liquidated by 2,410 (11,580) and October lost 572 (118,570). Cash lean index 08/09: 85.50, off .12. DTN projected slaughter for today is 423,000 head. The Saturday kill could be as large as 135,000 head.

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

(SK)

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