DTN Before The Bell-Livestock

Strong Gains Redevelop in Initial Trade

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Moderate to strong buyer interest is expected to develop over the near future following higher early trade Thursday. This is helping to bring additional longer-term support to the market. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 215 points higher while Nasdaq is up 61 points.

LIVE CATTLE:

Open: 50 cents to $1 higher. The overall tone of the live cattle futures is firming early Thursday morning. There is growing support in all cattle trade, but live cattle traders continue to closely follow the renewed interest in feeder cattle. This could help to spark some additional longer-term market shifts over the end of the week, and bring some much needed support to all fundamentals. Cash cattle trade remains undeveloped at this point, although there are a few scattered bids redeveloping at $124 per cwt in the South. Interest should improve, but the overall direction of the market is likely to remain sluggish. Asking prices remain at $130 live basis and $202 and higher dressed. Open interest Wednesday gained 1,316 positions (368,466). Spot February lost 996 positions (13,377) and April contracts added 267 positions (148,331). DTN projected slaughter for Thursday is 117,000 head.

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FEEDER CATTLE:

Open: $1 to $2 Higher. Strong early support has quickly moved into feeder cattle futures. This triple digit rally may help to stimulate additional futures and cash market activity through the rest of the week. Cash index for 2/13 is listed at $147.62, up 0.06. Open interest Wednesday gained 536 positions (55,933).

LEAN HOGS:

Open: Steady to 40 cents higher. Follow-through support is slowly developing early Thursday morning based on the renewed buyer activity seen midweek. It is uncertain just how deep the most recent buyer activity will be, or if this will continue to push prices higher through the morning. Again, increased focus will be placed on outside market direction, which could quickly shift market direction. Cash hog trade Thursday is expected steady to $1 lower. Most bids are expected to be $1 lower. Open interest Wednesday added 1,152 positions (236,934). Spot month February liquidated 46 positions (8,217) and April lost 535 positions (94,284). Cash lean index for 2/13 is $74.01, down 0.29. DTN projected slaughter for Thursday is expected to be 465,000 head. Saturday runs are expected at 82,000 head.

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

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Rick Kment