DTN Before The Bell-Livestock

Limited Trade Leaves Prices Mixed

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Light trade is seen in all livestock markets early Friday morning. Traders seem eager to exit the market with many expected to have already closed the books on needed trade activity. Trade volume is expected to remain sluggish through the rest of the session, which may limit additional market activity. Corn prices are steady in light trade. Stock markets are mixed, Dow Jones is 54 points lower while Nasdaq is up 13 points.

LIVE CATTLE:

Open: 20 to 50 cents lower. Light trade is seen through the entire cattle market Friday morning. Follow through pressure is seen through the live cattle complex with nearby contracts holding a 40 to 50 cent loss in nearby contracts during early trade. Deferred futures remain in a tighter trading range, but the overall weakness is evident across the complex. Markets are expected to be very thinly traded, which may limit additional market direction, but could add volatility to prices through the morning. Cash cattle interest is still sluggish. Packers are expected to be more aggressive through the morning, although at this point it is uncertain just how much higher early bids will be from levels over the last couple of days. It could easily be late in the day before active trade develops, although both sides desire to wrap things up as early as possible. Open interest Thursday fell 2,821 positions (356,514). Spot month June contracts lost 2,783 positions (48,463) and August contracts fell 656 positions (163,291). DTN projected slaughter for Friday is 115,000 head.

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FEEDER CATTLE:

Open: Steady to 20 cents lower. Very light activity is seen in cattle trade with feeder cattle markets steady to 20 cents per cwt lower in the early minutes of trade. The focus on additional market pressure following the swift turn lower late Thursday may limit additional market direction before the weekend break. Following Friday's trade, markets will remain closed until Tuesday morning, but this is not expected to be a significant factor late in the week due to the very limited trade volume that is expected to be seen. Cash index for 5/23 is listed at $134.44 up 1.01. Open interest Thursday fell 163 positions (47,038).

LEAN HOGS:

Open: Mixed. Light follow-through buyer support is slowly but steadily moving into the complex. Front-month June futures are holding a narrow 10 cent loss. The rest of the complex has found some firm follow-through buyer support moving into the complex. There is growing support developing in July and August futures with prices 70 to 80 cents higher in early trade. The focus on recent gains is not likely to increase overall volume through the day as most traders are busy preparing positions for the long weekend. Cash hog trade Friday is steady to 50 cents higher per cwt. Most bids are steady. Open interest Thursday added 1,748 positions (244,932). Spot month June fell 1,227 positions (30,090) and July added 1,158 positions (74,863). Cash lean index for 5/23 is $69.29, up 0.26. DTN projected slaughter for Friday is expected to be 448,000 head. Saturday runs are estimated at 30,000 head.

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

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Rick Kment