DTN Before The Bell-Livestock

Buyer Support Redevelops Through Cattle Futures

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Livestock futures are mixed to mostly higher with strong triple digit gains in cattle trade quickly confirming the midweek rally that started to develop. If support holds through the day, this shift higher could help to spark some additional underlying buyer support through the rest of the complex. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 158 points higher while Nasdaq is up 33 points.

LIVE CATTLE:

Open: 80 cents to $2 lower. Live cattle futures posted strong morning gains with the overall lack of follow-through pressure limited following strong midweek gains. Most contracts are holding gains of 80 to 90 cents per cwt, while June futures have continued to lead recent market support with a $1.60 per cwt gain in early buyer support. The focus on increased market activity will be key to sustain the current market activity and draw additional buyers back into the complex. Cash cattle activity remains at a standstill early Thursday morning. So much in the cash market will depend on morning moves in the futures trade. If follow through buyer activity moves quickly into the market and holds through most of the morning, then feedlot managers are expected to increase asking prices, but if prices shift lower on futures markets, packers are likely to follow that direction with lower bids. Open interest Wednesday gained 612 positions (357,587). Spot month April contracts lost 2,116 positions (30,169) and June contracts fell 86 positions (161,187). DTN projected slaughter for Thursday is 119,000 head.

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FEEDER CATTLE:

Open: $1 to $2 higher. Strong buyer support has continued to draw traders back into the market Thursday morning. With prices able to come back from previous market lows midweek, the focus on regaining momentum of commercial buyer interest is picking up speed. Nearby contracts are holding gains near $2 per cwt with the overall support seen in nearby contracts. Cash index for 4/3 is listed at $134.50 down 0.44. Open interest Wednesday fell 1,188 positions (52,925).

LEAN HOGS:

Open: Mixed. Traders remain sluggish early Thursday morning following the uncertainty that follow through buying will develop after strong gains held midweek. Prices are hovering from 45 cents lower to 30 cents higher with most contracts holding light losses in the opening minutes of trade. This could lead to additional market shifts as traders try to bring some stability back into the complex. Cash hog trade Thursday is expected 50 cents to $1 lower. Most bids are $1 per cwt lower. Open interest Wednesday added 368 positions (239,681). Spot month April fell 3,001 in positions (17,371) and June added 1,367 positions (100,863). Cash lean index for 4/3 is $55.60, down 0.40. DTN projected slaughter for Thursday is expected to be 465,000 head. Saturday runs are currently estimated at 167,000 head.

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

(SK)

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Rick Kment