DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate to sharp losses have quickly developed through the livestock complex. There is increased focus on weakening fundamentals through the end of the month despite the upcoming holiday weekend which is expected to spark additional consumer interest. Corn markets are trading lower in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 92 points lower while Nasdaq is down 32 points.

LIVE CATTLE:

Opening call: $1 lower. Sharp losses have quickly developed in live cattle futures early Thursday morning. The inability to bring buyers back to the table following the aggressive losses seen midweek added to the overall uncertainty in not only live cattle markets, but the entire livestock complex. It is uncertain just how much trade volume will be seen early in the session, although traders are focusing on increased buyer support may try to trickle into the complex late in the week. Cash cattle markets are looking for additional activity, although bids remain undeveloped during early morning movement. The light trade seen in the North is not likely going to set prices at this point, but it will likely create a weaker tone for the week. Dressed prices seen at $175 to $177 represent a $7 to $9 per cwt tumble from last week's price levels. This could limit additional buyer interest or market support later in the week. Although additional sales need to be seen in order to fuel expected procurement plans. Open interest Wednesday fell 1,517 positions (308,525). Spot August lost 1,200 positions (7,533) and October contracts fell 926 positions (155,665). DTN projected slaughter for Thursday is 117,000 head.

FEEDER CATTLE:

Opening call: 50 to 95 cents Lower. Follow through losses have quickly developed across all feeder cattle trade with most aggressive pressure seen in deferred contracts. The overall lack of support across the complex continues to drive additional uncertainty into the entire cattle trade through the end of the week. Cash lean index for 8/15 is $144.49, down 0.83. Open interest Wednesday fell 956 position (55,694).

LEAN HOGS:

Opening call: 50 cents to $1 lower. Moderate to strong follow through selling pressure has redeveloped with triple digit losses quickly redeveloped with the most aggressive losses seen in the October and December contracts. Light volume is expected to be seen through the morning, but widespread pressure continues to be seen in all livestock markets. Cash bids are steady to $1 lower with most bids 50 cents lower. Open interest Wednesday fell 426 positions (275,629). Spot month October slipped 165 positions (124,498) and December added 279 positions (59,568). Cash lean index for 8/15 is $84.03, down 0.35. DTN projected slaughter for Thursday is 443,000 head. Saturday runs are expected to be near 125,000 head.

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

(SK)

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