DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm gains have steadily developed across cattle trade with nearby live cattle and feeder cattle markets holding moderate to strong support. Lean hog futures have continued to erode with pressure developing across the complex and continuing to weaken the overall market tone. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 120 points higher while Nasdaq is up 72 points.

LIVE CATTLE:

Open: Steady to 70 cents higher. Moderate to strong gains have quickly developed across the market with traders looking for increased overall buyer support as traders accounted for midweek gains that is helping to firm general market tones. April futures are holding 55 cent gains through early trade with the focus on increased buyer support seen across all contracts. Although trade may remain sluggish during most of the morning, buyers are supported by the early moves in feeder cattle markets, which should help to draw additional underlying buying activity. Cash cattle markets are sluggish following the extremely thin trade seen late Wednesday. The few deals that were reported were seen at $118 live basis and $189 dressed basis. At this point, this is not enough to establish a good test, and could create some additional market shifts through the rest of the week. Packers are likely to show more interest as the day progresses. This may add some volatility to the complex. Open interest Wednesday added 1,665 positions (348,223). Spot month April contracts lost 1,138 positions (2,385) and June contracts fell 635 positions (148,288). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: 20 to 50 cents higher. Follow-through buyer activity is seen in the complex with traders focusing on the potential to bring increased volume to the market through the end of the week. The strong moves higher in nearby contracts late Wednesday helped to bring additional support to nearby contracts. It is still uncertain just how deep buyer interest remains early Thursday morning, but if stability continues to be seen through the first hour of trade, there could be some additional support developing late in the day as commercial traders may step back into the complex. Cash index for 4/24 is listed at $138.21 up 0.13. Open interest Wednesday fell 440 positions (48,033).

LEAN HOGS:

Open: 50 to 90 cents lower. Moderate pressure has quickly developed through the lean hog complex. There is growing uncertainty about the ability to hold the current market support through the entire complex. Although trade is expected to remain light across most futures, the continued strong movement of pork prices has helped to draw buyers back into the market. June futures continue to lead the market lower as the most active trade in the entire complex is seen in June contracts through late spring. Cash hog trade Thursday is $1 lower to 50 cents higher. Most bids are seen steady. Open interest Wednesday added 2,032 positions (247,267). Spot month May fell 102 positions (3,296) and June added 500 positions (95,246). Cash lean index for 4/24 is $60.44, up 1.44. DTN projected slaughter for Thursday is expected to be 465,000 head. Saturday runs are scheduled at 53,000 head.

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

(SK)

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