DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are stuck in a mixed trading range early Thursday morning as traders continue to focus on previous market pressure, especially in hog trade. The potential for end-of-week buyer support is developing, which could quickly add some underlying fundamental support back to the complex through the next few hours. Corn prices are higher in light trade. Stock markets are lower, Dow Jones is 138 points lower while Nasdaq is down 19 points.

LIVE CATTLE:

Open: Mixed. Limited buyer support is moving into the complex early Thursday morning, although the overall tone of the complex continues to remain sluggish with traders focusing on lackluster overall interest through the first couple days of May. The focus on strength in beef values and the potential for additional cash market support at the end of the week is helping to draw these buyers into summer contracts. But deferred futures still remain weak as the concern of consistent follow through pressure is limiting buyer activity in these early 2019 contract months. Cash cattle markets remain sluggish Thursday. The very light trade that developed late Wednesday afternoon is not enough to create a good market test as the price range was extremely wide and most of the reported trade was sold on a delayed delivery basis. A few bids have been recirculated early Thursday at $120 live basis, with asking prices still at $125 to $126 per cwt on a live basis. Interest is expected to pick up through the day Thursday. Open interest Wednesday added 3,892 positions (354,618). Spot month June contracts lost 1,820 positions (136,889) and June contracts fell 3,211 positions (101,225). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: Mixed. Light trade is seen across the feeder cattle complex as traders look for the potential of market support during the first week of May. The pullback in prices in the last week is still causing traders to take a cautious approach to the market with the inability of May contracts to hold prices at or above $140 per cwt. But the expectation that stronger beef demand will continue to develop over the near future is likely to add even more support to the entire complex. Cash index for 5/1 is listed at $139.13 down 0.14. Open interest Wednesday added 685 positions (44,493).

LEAN HOGS:

Open: Mixed. Initial buyer support is slowly moving back into nearby contracts Thursday morning, although the focus on the market continues to be squarely placed on previous market pressure in the complex. There is growing interest to bring additional buyers back to the market during early May as prices have quickly eroded over the last two trading sessions. This may help to support additional underlying activity through the rest of the week if initial gains can hold Thursday. Cash hog trade early Thursday are seen steady to $1 per cwt higher. Most bids are steady to firm. Open interest Wednesday slipped 270 positions (254,910). Spot month May fell 131 positions (2,861) and June fell 2,486 positions (94,800). Cash lean index for 5/1 is $62.66, up 0.21. DTN projected slaughter for Thursday is expected to be 465,000 head. Saturday runs are expected to be seen at 41,000 head.

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

(SK)

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