DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate to firm pressure is expected to be seen through the morning Friday as early pressure quickly moved back into the live cattle and lean hog markets. This could spark some additional pressure through the rest of the market as cash trade has essentially wrapped up for the week. Corn markets are trading higher in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 42 points lower while Nasdaq is down 10 points.

LIVE CATTLE:

Opening call: 70 cents to $1 lower. Moderate nearby contract weakness is seen following the strong triple digit losses seen Thursday. The overall lack of support in the complex continues to drive additional buyer support back into the market and could spark increased interest through late day Friday activity. The focus on bringing a sense of stability back into the cattle complex before the end of the week may spark increased activity through the market. Cash cattle markets remain quiet following light to moderate trade seen Thursday. The focus on lower cash market prices that developed through the week has brought about more weakness to the complex, but packers are expected to have attained the needed cattle for next week's schedules. Bids are undeveloped at this point and any business that is done is expected to remain in the recent price range as clean up activity is all that is looked for through the day. Open interest Thursday added 1,581 positions (309,910). Spot August lost 1,447 positions (6,086) and October contracts gained 162 positions (155,682). DTN projected slaughter for Friday is 117,000 head.

FEEDER CATTLE:

Opening call: 50 to $1.50 Lower. Firm losses have quickly redeveloped early Friday morning as traders still try to account for the strong pressure in cash cattle trade as well as the lack of support seen at the end of the week through the entire livestock market. Volume remains light in the early minutes of trade, but the focus continues to be driven by unsupportive live cattle futures. Cash lean index for 8/16 is $145.86, up 0.95. Open interest Thursday fell 605 position (54,939).

LEAN HOGS:

Opening call: 50 cents to $1 lower. Additional firm pressure is seen through the lean hog futures complex with traders focusing on even more softness developing in cash and pork values at the end of the week. The follow through pressure in cattle trade is also creating uncertainty that has trickled into the lean hog complex. Cash bids are steady to $1 lower with most bids $1 lower. Open interest Thursday liquidated 9,523 positions (265,094). Spot month October slipped 4,457 positions (120,024) and December added 15 positions (59,578). Cash lean index for 8/16 is $83.70, down 0.33. DTN projected slaughter for Friday is 425,000 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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