DTN Before The Bell-Livestock

GENERAL COMMENTS

Light activity is seen in the livestock futures complex. With most contracts trading firmly lower. The focus on market pullbacks from previous cattle market gains has put more emphasis on end of the month position taking. This may add even more uncertainty to the complex over the near future. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 135 points higher while Nasdaq is up 37 points.

LIVE CATTLE:

Open: Mixed. Narrow trading ranges have slowly developed early Wednesday morning. Although traders tried to focus on the higher moves seen Tuesday, the focus on the premium in February contracts which are getting ready to expire will once again put more emphasis on spring and summer futures prices ranging from $113 to $123 per cwt. There is growing support in beef values over the last couple of days, but the volatility in futures trade may continue to keep many traders from fully committing to the market as they wait for additional technical and fundamental direction through the end of the month and early March. Cash cattle activity remains quiet with the focus on the potential for late day trade. There is likely to be some additional packer interest developing but bids remain quiet at this point. Open interest Tuesday added 138 positions (377.083). Spot month February contracts lost 923 positions (686) and April contracts slipped 2,155 positions (139,240). DTN projected slaughter for Wednesday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 30 cents lower. Light pressure is seen in nearby feeder cattle futures early Wednesday morning following the choppy moves over the last couple of days. The pullback from moderate to strong gains seen Tuesday is potentially focused on squaring positions at the end of the month. But there is likely to be some additional market shifts developing over the next couple of days, which will keep volatility high in all cattle trade. Cash index for 2/26 is listed at $147.76, down 0.46. Open interest Tuesday added 561 positions (58,134).

LEAN HOGS:

Open: Steady to $1 lower. Pressure is slowly redeveloping across the lean hog complex with nearby contracts holding losses near 80 cents per cwt in the opening minutes of trade. This overall lack of follow through support following the mixed trade early in the week is likely to create some additional market pressure in all contract months. Traders still focus on the ability to keep prices in the current trading range established over the last couple of weeks, which may limit the volatility across the entire market. Cash hog trade Wednesday is expected steady to $1 lower. Most bids are steady to 50 cents lower. Open interest Tuesday added 2,085 positions (230,780). Spot month April fell 391 in positions (85,641) and June gained 808 positions (49,756). Cash lean index for 2/26 is $68.83, down 0.49. DTN projected slaughter for Tuesday is expected to be 463,000 head. Saturday runs are expected at 132,000 head.

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

(SK)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.