DTN Before The Bell-Livestock

GENERAL COMMENTS

Early market weakness has developed through the entire livestock complex although very limited activity has been seen through the complex. There is growing uncertainty as to just how much additional long term direction may develop in the near future. Corn prices are lower in light trade. Stock markets are mixed, Dow Jones is 17 points higher while Nasdaq is down 9 points.

LIVE CATTLE:

Open: Steady to 30 cents lower. Limited pressure is seen early in the session with traders focusing on the ability to draw additional buyers back into the market. April futures continue to hold well above last week's lows, but the $10 to $13 premium over summer contracts seen in the April contracts is creating some additional market uncertainty to the complex. Traders will continue to focus on outside market direction as well as the ability to bring buyer support back into beef markets through the end of the week. Cash cattle markets are sluggish with traders focusing on trade that developed over the last couple of days. Even though some additional clean-up trade is possible over the next couple of days, the tone has been set unless a major shakeup is seen in futures trade. Open interest Wednesday slipped 405 positions (361,712). Spot month April contracts lost 4,430 positions (73,731) and June contracts added 1,866 positions (153,682). DTN projected slaughter for Thursday is 117,000 head.

FEEDER CATTLE:

Open: 40 to 80 cents lower. Feeder cattle trade is trading under pressure early Thursday morning with the focus on additional market weakness developing through the complex. The inability for the complex to hold strong triple digit gains midweek seemed to be the tipping point, which has allowed moderate to firm selling pressure back into the complex. This could create some additional follow through pressure moving into the cattle market and further erode nearby and deferred markets. Cash index for 3/13 is listed at $143.25 up 0.08. Open interest Wednesday fell 498 positions (51,427).

LEAN HOGS:

Open: Steady to 50 cents lower. Light pressure is slowly developing through the lean hog complex. Even though markets firmed in most contracts Wednesday, the overall tone of the market remains weak with prices testing August 2017 lows. This created additional pressure through the entire complex which may add even more selling activity to move through the complex over the near future. Cash hog trade Thursday is expected steady to $1 per cwt lower. Most bids are expected 50 cents to $1 lower. Open interest Wednesday added 760 positions (231,266). Spot month April fell 3,103 in positions (40,950) and June gained 1,485 positions (82,671). Cash lean index for 3/13 is $66.38, down 0.29. DTN projected slaughter for Thursday is expected to be 460,000 head. Saturday runs are expected to be near 119,000 head.

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

(SK)

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