DTN Before The Bell-Livestock

GENERAL COMMENTS

Light to moderate pressure is developing in cattle trade. The aggressive triple digit losses seen Thursday has left markets extremely weak. Traders are looking for increased activity to move through the complex at the end of the session, but this may not develop due to the overall market weakness. Hog futures are holding light to moderate support in end of the week short covering activity. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 176 points higher while Nasdaq is up 55 points.

LIVE CATTLE:

Open: Steady to 50 cents lower. Pressure is seen in live cattle futures with traders focusing on both outside market shifts as well as the pressure in feeder cattle trade leading the market lower. This may add even more end of the week softness to develop in the complex. Traders are looking for increased underlying support which could help to bring buyers back to the table in the near future. Cash cattle activity is expected to be generally done for the week following moderate trade which developed Thursday. The focus on steady cash markets seems to be allowing both sides to regroup and wait until next week until additional activity is seen. There is the possibility that some clean up trade may develop, but prices are likely to be set at previous levels. Open interest Thursday slipped 2,627 positions (367,898). Spot month April contracts lost 7,401 positions (102,707) and June contracts added 1,794 positions (139,270). DTN projected slaughter for Friday is 115,000 head.

FEEDER CATTLE:

Open: 30 to 70 cents lower. Moderate selling pressure has quickly redeveloped in cattle trade. The feeder cattle complex is leading this move lower with very little activity developing across the complex. There is firm pressure that may continue to be seen through the market the rest of the session as traders search for a sense of support over the next couple of trading sessions. Cash index for 3/7 is listed at $144.72 down 0.24. Open interest Thursday fell 989 positions (55,063).

LEAN HOGS:

Open: Mixed. Light to moderate buyer support is slowly moving back into the market. There is the expectation that increased trade may develop which could spark some increased overall activity. But this may limit the overall volume in the market late in the week. Front month futures are shifting lower, although the rest of the complex has seen late week market corrections. Cash hog trade Friday is expected steady to $1 per cwt lower. Most bids are expected steady to 50 cents lower. Open interest Thursday liquidated 1,952 positions (221,370). Spot month April fell 7,469 in positions (58,904) and June gained 3,752 positions (59,813). Cash lean index for 3/7 is $67.64, down 0.02. DTN projected slaughter for Friday is expected to be 453,000 head. Saturday runs are expected at 118,000 head.

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

(SK)

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