DTN Before The Bell-Livestock

GENERAL COMMENTS

Strong losses have continued to move into the complex. There is growing uncertainty as to just how many traders will be seen Friday or if additional sharp losses will develop midmorning. Triple-digit losses are seen in cattle and hog trade, which is limiting any sense of stability through the end of the week. Corn prices are lower in light trade. Stock markets are mixed, Dow Jones is 80 points higher while Nasdaq is down 6 points.

LIVE CATTLE:

Open: $1 to $2.50 lower. Sharp losses continue to be seen through the entire live cattle complex. June futures are leading the market lower with losses in excess of $2 per cwt, which given the pressure in the rest of the livestock market could lead to limit losses before the end of the session. It is uncertain just how much additional selling pressure will develop before the end of the week, as traders have hammered prices extremely hard over the last week and there may not be a lot of additional liquidation to be done. Cash cattle markets are quiet as many expect that most if not all of the needed business for the week is already been placed in the books. There could be a few clean-up bids trickling into the market through the day, but this will not likely change overall price structure at this point. Open interest Thursday added 1,017 positions (356,307). Spot month April contracts lost 2,702 positions (49,410) and June contracts added 1,239 positions (159,669). DTN projected slaughter for Friday is 115,000 head.

FEEDER CATTLE:

Open: $1 to $2 lower. Traders are quickly reacting to the gains that developed Thursday and early moves Friday morning have evaporated any previous support. Tradrs are looking for increased pressure to be seen through most of the morning with losses as much as $2 per cwt seen in most nearby contracts. This could lead to even more aggressive market pressure next week as traders may end the week with a very bearish tone. The focus of the upcoming cattle on feed report will also be on the minds of traders, but many are expecting more pressure from the report than any significant support. Cash index for 3/21 is listed at $140.35 down 0.60. Open interest Thursday lost 205 positions (53,123).

LEAN HOGS:

Open: $1 to $2 lower. Triple-digit losses have once again flooded into lean hog futures markets with prices $1.40 to $2.25 per cwt in nearby contracts during the first few minutes of trade. The continued pressure seen in the market through the week and inability to bring some needed stability to the complex has allowed for aggressive liquidation in all nearby contracts. All of the remaining 2018 contracts are holding triple-digit losses even though light volume is seen in these fall and winter contracts. Cash hog trade Friday is expected 50 cents to $2 lower. Most bids are seen 50 cents to $1 per cwt lower. Open interest Thursday added 1,374 positions (233,493). Spot month April fell 1,982 in positions (28,567) and June gained 2,082 positions (93,530). Cash lean index for 3/20 is $63.63, down 0.66. DTN projected slaughter for Friday is expected to be 452,000 head. Saturday runs are expected to hit 118,000 head.

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

(SK)

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