DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures have posted additional selling pressure early Friday morning. The moderate to strong pressure seen in the live cattle trade Thursday is bringing additional concern of follow-through selling back to the table. Corn prices are lower in light trade. Stock markets are lower, Dow Jones is 45 points lower while Nasdaq is down 49 points.

LIVE CATTLE:

Open: Steady to 50 cents lower. Initial pressure is slowly developing across live cattle trade. This softness follows the $2 per cwt losses seen late day in several nearby summer contract months. There is growing weakness that may continue to develop across the market, although traders continue to focus on the cash market activity at the end of the week. Cash cattle activity still remains undeveloped early Friday morning following light to moderate trade seen through the South. Prices on a live basis through the South developed at $121 to $122 per cwt. This is nearly $4 per cwt higher than week ago levels, and may be enough for packers to call it a week in this areas. Trade through the North remains undeveloped although traders continue to focus on futures trade. Bids are yet to develop, although asking prices are holding at $195 and higher. Open interest Thursday gained 884 positions (346,223). Spot month April contracts lost 2,354 positions (7,949) and June contracts fell 119 positions (152,341). DTN projected slaughter for Friday is 115,000 head.

FEEDER CATTLE:

Open: Steady to 90 cents lower. Early morning weakness continues to develop across the complex with traders still trying to assess the triple-digit losses seen Thursday. Trade volume is likely to remain sluggish through most of the morning as the focus on longer-term direction. Nearby contracts are holding limited weakness with 10 to 15 cent losses, with more aggressive pressure developing in deferred late year contracts. Cash index for 4/18 is listed at $137.12 down 0.78. Open interest Thursday added 675 positions (50,055).

LEAN HOGS:

Open: Steady to 70 cents lower. Limited pressure is seen through the entire complex with traders looking for additional longer term market activity to develop following Thursday's pullback. But given the strong surge in prices through the month of April, the market is ripe for a correction, even if longer-term support is still hovering across the complex. There is growing support that additional buyer activity may move into the complex as traders seem to be based on longer-term market shifts. Cash hog trade Thursday is steady to $2 higher. Most bids are $1 higher. Open interest Thursday added 368 positions (237,293). Spot month May fell 28 positions (3,547) and June fell 1,269 positions (93,183). Cash lean index for 4/18 is $55.97, up 0.92. DTN projected slaughter for Friday is expected to be 454,000 head. Saturday runs are pegged at 118,000 head.

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

(SK)

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