DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm pressure is redeveloping through the cattle complex. This is adding longer-term concerns to the overall movement in the cattle market given the fact that August futures have now shifted below $110 per cwt. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 79 points higher while Nasdaq is up 19 points.

LIVE CATTLE:

Open: Steady to 50 cents lower. Increased pressure is seen in live cattle futures. The most aggressive losses are seen in deferred futures trade while traders remain extremely cautious surrounding long term demand for beef given the availability of cattle supplies available to the market through the end of the year. This may add even more short- and long-term weakness to the entire complex as traders try to remain focused on the balance between supply and demand through the upcoming spring and summer months. Cash cattle activity is expected to pick up in the North through the day as more cattle are likely to need to be traded. There are a few early bids at $205 dressed basis in the North. Southern business is expected to be wrapped up due to early-week trade. But some additional interest is shown in the North. Open interest Thursday slipped 1,371 positions (360,712). Spot month April contracts lost 4,230 positions (73,731) and June contracts added 1,166 positions (153,682). DTN projected slaughter for Thursday is 115,000 head.

FEEDER CATTLE:

Open: 40 to 60 cents lower. Follow-through pressure is developing across the feeder cattle market with increased selling activity moving into the market through the morning. This is adding to the sharp triple-digit losses seen Thursday and may likely create even more weakness through the end of the week. Cash index for 3/13 is listed at $143.25 up 0.08. Open interest Thursday added 188 positions (51,590).

LEAN HOGS:

Open: Mixed. Initial trade seen in the lean hog complex is showing mixed activity within a very narrow range. The overall lack of direction in the complex continues to bring some additional support to the market, although traders may focus on the ability to shift markets in one direction through the end of the session. The bounce off of recent lows in nearby contracts is helping to spark some additional buyer support, but could be limited as markets will likely remain range bound over the near future. Cash hog trade Friday is expected steady to $1 per cwt lower. Most bids are expected 50 cents to $1 lower. Open interest Thursday lost 806 positions (230,058). Spot month April fell 3,649 in positions (36,928) and June gained 2,158 positions (84,830). Cash lean index for 3/13 is $66.38, down 0.29. DTN projected slaughter for Friday is expected to be 453,000 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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