DTN Before The Bell-Livestock

GENERAL COMMENTS

Light to moderate buyer activity is seen in lean hog and cattle markets as traders slowly step back into the market. The winter weather storms and cold weather moving through the complex has created some uncertainty as to just how active processing and transportation systems will hold up over the week. This could limit market activity with many traders focusing on these factors. Corn futures are lower in light trade. Stock market futures are higher, Dow Jones is 140 points higher while Nasdaq is up 14 points.

LIVE CATTLE:

Open: Steady to 30 cents higher. Light to moderate buyer support is slowly trickling into the market Thursday morning. The strong support in beef values through the week as well as increased underlying support surrounding the expectation of higher cash cattle activity is helping to bring traders back to the table. This may support longer term buyer interest across all cattle trade. Cash cattle activity remains slow to develop Thursday morning, although a few bids of $121 are seen in parts of the south. This could help to improve packer interest through the day although it may easily be Friday before any active trade develops. Asking prices are listed at $126 to $127 live basis and $200 and higher dressed. Open interest Wednesday added 1,934 positions (341,457). Spot February lost 2,856 positions (116,247) and April contracts gained 2,876 positions (98,275). DTN projected slaughter for Thursday is 117,000 head.

FEEDER CATTLE:

Open: Steady to 20 cents higher. Light buyer support has trickled into the cattle complex Thursday morning with increased underlying support developing across the entire market. There is growing support through the complex that may help to bring about increased trade activity during the end of the week. Cash lean index for 1/2 is listed at $155.90, up 0.57. Open interest Wednesday lost 14 positions (51,734).

LEAN HOGS:

Open: Steady to $1 higher. Moderate to firm buyer support has quickly moved into nearby lean hog futures trade as traders continue ratchet prices higher following firmness in fundamentals during early January. But the support is fading quickly in deferred contracts with these contract months posting steady to 10 cent gains in the early minutes of trade. The overall tone of the market remains strong, although there continues to be some uncertainty as to just how much additional momentum will develop. Cash bids are steady to $2 per cwt higher. Most bids are $1 higher. Open interest Wednesday added 1,469 positions (244,201). Spot month February fell 3,284 positions (81,425) and April added 2,497 positions (72,424). Cash lean index for 1/02 is $62.75, up 0.57. DTN projected slaughter for Thursday is likely to be limited to near 415,000 head due to weather conditions. Saturday runs are projected at 385,000 head.

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

(SK)

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