DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade is seen in all livestock trade with traders focusing on the sharp losses that developed Thursday. This could bring about increased market shifts over the near future as traders try to square positions ahead of the weekend. Corn prices are higher in light trade. Stock market futures are higher, Dow Jones is 67 points Higher while Nasdaq is up 21 points.

LIVE CATTLE:

Open: Mixed. Futures trade has bounced higher and lower through the initial minutes of trade Friday. Prices have moved from 50 cents lower to 40 cents per cwt higher as traders try to adjust positions following the near limit losses seen Thursday. The wide market shifts this late in the week seem to have broken loose some significant market uncertainty which is creating some additional trade volume and market swings over the complex. Most contracts are currently holding narrow to moderate gains at this point, but the ability to hold these gains is being questioned. Cash cattle activity remains quiet heading into the last day of the week with bids still quiet Friday morning, but likely to become much more active through the next couple of hours. Trade is more uncertain now following the sharp pressure in futures Thursday and could hinge on the ability for traders to move into the futures complex Friday. Open interest Thursday added 2,113 positions (363,692). Spot February lost 2,994 positions (43,802) and April contracts gained 943 positions (148,133). DTN projected slaughter for Friday is 118,000 head.

FEEDER CATTLE:

Open: Mixed. Light support is seen in deferred feeder cattle futures while nearby trade is holding moderate pressure. The overall lack of support seen Thursday is evident in nearby contracts which is sparking follow through pressure. This could add even more pressure to the complex through the end of the day. The triple-digit losses which developed Thursday quickly eroded most of the week's gains, and caused traders to rethink any sense of strong market support that had started to accumulate in the cattle complex. Cash index for 1/24 is listed at $147.68, down 0.35. Open interest Thursday added 69 positions (53,912).

LEAN HOGS:

Open: Mixed. Initial trade Friday is mixed in a narrow to moderate range following the sharp late day losses that flooded the complex on Thursday afternoon. This early morning activity is still unable to spark additional firmness, as there may be some unsteadiness seen in the first hour of trade. Additional back and forth may quickly be seen over the day, causing some concern through not only hog futures, but the entire livestock market. Cash hog trade Wednesday is expected to steady to $2 lower. Most bids are expected to be steady. Open interest Thursday fell 3,572 positions (247,820). Spot month February fell 2,469 positions (22,629) and April lost 2,627 positions (106,178). Cash lean index for 1/24 is $73.77, down 0.03. DTN projected slaughter for Friday is expected to be 463,000 head. Saturday runs are expected to hit 135,000 head.

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

(SK)

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