DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures remain mostly lower early Friday morning. This pullback following the firm gains seen Thursday seems to be focused more on end-of-week positioning than any other activity going on in the livestock complex. Corn prices are lower in light trade. Stock markets are mixed, Dow Jones is 82 points higher while Nasdaq is down 7 points.

LIVE CATTLE:

Open: Steady to 15 cents lower. Market stability is seen early Friday morning with traders seemingly unwilling to quickly step back into the market. The firm support in the complex Thursday is still allowing the complex to hold a positive market tone. This may add some additional uncertainty to the complex through the end of the week with traders not only focusing on fundamental market shifts, but also trying to adjust positions through early May as they focus on long-term market direction and trade interest. Cash cattle markets are sluggish early Friday morning following extremely light and scattered trade seen over the last couple of days. At this point both sides are still focused on pushing markets to their side before the end of the week. It is likely that asking prices and bids will remain sluggish early in the day, but improve significantly as time goes on. Most of the trade already developing this week has been set for delayed delivery. This will put even more emphasis on ensuring there are enough ready cattle to move to plants over the next few days. Open interest Thursday fell 1,647 positions (357,794). Spot month June contracts lost 11,387 positions (92,907) and August contracts gained 8,325 positions (136,062). DTN projected slaughter for Friday is 116,000 head.

FEEDER CATTLE:

Open: 10 to 30 cents lower. Very limited activity is seen across all livestock trade early Friday morning with traders in the feeder cattle market leading the cattle complex lower. The strong triple digit gains in nearby trade seen Thursday is allowing for some position taking to take place most contracts. It is expected that overall trade volume will remain extremely sluggish through most of the morning as traders look for increased movement in outside markets and with the development of cash cattle trade. Cash index for 5/9 is listed at $137.93 down 0.07. Open interest Thursday remained unchanged (44,757).

LEAN HOGS:

Open: Steady to 50 cents lower. Moderate pressure is seen in most lean hog futures trade with the focus on increased market softness developing through the end of the week. Traders in the opening minutes of activity are pulling back from Thursday's gains with prices drawing more attention. The recent rally in nearby lean hog futures over the last several days has pulled markets off of support levels, but still remains well below any resistance levels. This could add uncertainty to the complex heading into the weekend. Cash hog trade Friday is steady to $1 per cwt higher. Most bids are steady to firm. Open interest Thursday added 1,301 positions (241,895). Spot month May fell 48 positions (1,981) and June fell 6,513 positions (63,538). Cash lean index for 5/9 is $63.73, up 0.18. DTN projected slaughter for Thursday is expected to be 444,000 head. Saturday runs are estimated at 44,000 head.

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

(SK)

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