DTN Before The Bell-Livestock

Light Pressure Develops in Cattle Futures

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

Light to moderate pressure is seen in most livestock trade early Friday morning. Traders are focusing on squaring positions in cattle trade while lean hog markets are showing firm follow through losses. Markets will remain closed Monday due to Presidents Day. This will likely bring additional volume to the market late Friday. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 10 points higher while Nasdaq is up 7 points.

LIVE CATTLE:

Open: Mixed. There is very little additional direction through the morning Friday with increased support developing in the complex. The longer term focus continues to move additional commercial buyer activity into the market. Cash cattle markets going into Friday morning continue to be quiet with bids and asking prices expected to be revisited through the morning. The wide gap between bids and asking prices need to change sometime during the day as both sides need to get business done. It is likely to be a quick affair once trade does start to develop. Asking prices are likely to start at $124 live and $198 dressed, but should improve if futures trade is firm. Asking prices remain at $130 live basis and $205 dressed. Open interest Thursday gained 5,603 positions (373,922). Spot February lost 892 positions (12,484) and April contracts slipped 54 positions (148,179). DTN projected slaughter for Friday is 115,000 head.

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FEEDER CATTLE:

Open: Steady to 30 cents lower. Early pressure is developing across feeder cattle futures following the strong market support. There is some uncertainty as to how much increased pressure will be seen in the near future. Cash index for 2/14 is listed at $147.70, up 0.08. Open interest Thursday added 1,286 positions (57,065).

LEAN HOGS:

Open: Steady to $1 lower. Strong pressure is redeveloping across lean hog futures complex. This is adding even more weakness through the complex and could add long term pressure to the market. Cash hog trade Friday is expected steady to $1 lower. Most bids are expected to be 50 cents to $1 lower. Open interest Thursday fell 754 positions (236,087). Spot month February unchanged in positions (8,129) and April lost 2,231 positions (92,055). Cash lean index for 2/14 is $73.49, down 0.52. DTN projected slaughter for Friday is expected to be 455,000 head. Saturday runs are expected at 83,000 head.

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

(SK)

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Rick Kment