DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade has developed in live cattle and lean hog futures as traders try to adjust to the previous losses seen over the last couple of days. This is allowing light, but stable buyer support to move into nearby contracts as traders try to square positions at the end of the session. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 20 points higher while Nasdaq is up 48 points.

LIVE CATTLE:

Open: mixed. Narrow single-digit gains have slowly developed across the nearby live cattle futures trade. The rest of the complex is holding sluggish losses, with very little long-term direction or incentive for traders to move back into the market at this point. The lack of follow-through selling pressure carried over from Thursday may bring some renewed support back to the market through the rest of the morning. But little change in fundamental or technical direction through the morning could keep trade subdued during most of the session. Cash cattle activity is sluggish with just a few bids redeveloping in the South at $121 per cwt. The overall lack of direction in the market continues to push cash trade expectations to the end of the day, although more packer interest is likely to develop through the morning. Asking prices are seen at $124 and higher live basis, and $200 to $203 dressed basis in the North. Open interest Thursday added 1,683 positions (349,678). Spot month April contracts lost 1,060 positions (1,325) and June contracts fell 824 positions (147,366). DTN projected slaughter for Friday is 118,000 head.

FEEDER CATTLE:

Open: 20 to 50 cents lower. The pullback in prices late day Thursday has allowed for additional light to moderate selling activity to quickly develop across the complex. More pressure is seen in feeder cattle trade at this point than any other livestock market as traders seem to be adjusting back from the recent market support. May contracts are trading at $140 per cwt and continue to be trading near the top end of the for the last month and a half. Even though volume is expected to remain sluggish, price pressure may allow for position taking at the end of the trading session. This could bring some ad. Cash index for 4/25 is listed at $139.49 up 1.28. Open interest Thursday fell 88 positions (47,932).

LEAN HOGS:

Open: mixed. Limited trade is seen Friday morning across lean hog futures with very light activity expected to develop through most of the day. The mixed movement in cash markets early in the day is causing some traders to remain with current positions as they wait for additional direction both in outside markets and hog fundamental market moves. This could leave prices hovering within a moderate range through the rest of the session as traders close out the week, and prepare for month end early next week. Cash hog trade Friday is $1 lower to $1 higher. Most bids are seen steady. Open interest Thursday added 3,083 positions (250,240). Spot month May fell 55 positions (3,241) and June added 1,814 positions (96,950). Cash lean index for 4/25 is $61.23, up 0.79. DTN projected slaughter for Friday is expected to be 455,000 head. Saturday runs are scheduled at 53,000 head.

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

(SK)

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