DTN Before The Bell-Livestock

GENERAL COMMENTS

The cash cattle trade remain in slow gear this morning with few bids yet on the table (some opening bids have been noted at $118 in Texas and Kansas), At least moderate trade volume should have to develop in most feeding areas sometime today. Packers seem short bought and need to take on live inventory. Yet sluggish box movement is causing concern for processing margins. But feedlot managers feel a bit more chesty than they have in weeks thanks to this week's rally in futures. Asking proces are starting out around $120 in the South and $190-192 plus in the North. Cash hog bids around the circuit are generally firm, ranging from steady to$1 higher (mostly .50-$1 higher). Corn futures are fractionally lower as traders remain cautious ahead of the snowstorm expected this week over much of the WCB. The stock market has opened higher this morning with the Dow up 126 points and the Nasdaq positive by 30.

LIVE CATTLE:

Live contracts are 40-70 higher as of this writing, supported by residual buying, technical encouragements, and suggestions of greater packer spending sometime during the day. If both cash buyers and sellers dig in, significant trade volume could be delayed until late this afternoon. Given yesterday erosion in open interest, the rally was primarily fueled by short covering. Open interest on Thursday decreased by 648 (346,045). Spot April liquidated by 1,902 (14,411) and June lost 1,204 (154,561). DTN projected slaughter for today is 114,000 head. The Saturday kill should be around 32,000 head.

FEEDER CATTLE:

Feeders seem to be following the early trail blazed by their live counterparts. Prices are currently 40-50 higher. Open interest on Thursday increased by 5 (51,031). CME cash feeder Index for 04/11: 135.76, up 0.91.

LEAN HOGS:

Lean hog futures have opened narrowly mixed thanks to a slow combo of spillover buying and late week liquidation. Spot April is expected to expire today at 12:00 CDT. Open interest on Thursday surged by 3,457 (244,067). Spot April liquidated by 762 (11,717) and June lost 697 (96,988). CME cash lean index for 04/11: 52.97, off 0.05. DTN projected slaughter for today is 455,000 head. DTN projected the Saturday slaughter to atotal close to 110,000.

John A. Harrington can be reached at john.harrington@dtn.com

(SK)

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