DTN Before The Bell-Livestock

Limited Selling Develops Early Thursday

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

Livestock futures remain mostly lower early Thursday morning with the focus on increased overall pressure in cattle trade. There is growing concern that traders will once again move back into the market as they focus on cash market direction as well as outside market shifts seen over the last couple of days. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 86 points higher while Nasdaq is up 43 points.


Open: 20 to 50 cents lower. Pressure is redeveloping early Thursday morning. Although trade volume remains light and overall market direction is sluggish, the overall tone of the complex remains under pressure following the price erosion through the last couple of days. June futures are attempting to bring some stability into the market with a 15 cent loss, while the rest of nearby contracts are holding 37 to 50 cent losses in the initial minutes of trade. Cash cattle interest is expected to slowly increase through the day. Light trade developed across the North with dressed trade seen at $178 to $181, with most sales seen at $181 dressed basis. But there is not enough trade to establish a good market trend at this point. Asking prices still remain firm near $117 and higher live and $185 and higher dressed. Open interest Wednesday gained 1,552 positions (333,000). Spot month June contracts lost 628 positions (10,333) and August contracts slipped 695 positions (152,654). DTN projected slaughter for Wednesday is 120,000 head.


Open: Steady to 30 cents lower. Light pressure is seen in nearby feeder cattle trade as follow-through losses have developed after Wednesday's inability to bring buyers back to the table. The overall tone of the market is starting to weaken, which may limit additional support through the near future. There could be some additional support moving into trade late in the day if market stability is seen in grain and live cattle trade over the next few hours. Cash index for 6/12 is listed at $141.02 up 0.07. Open interest Wednesday added 677 positions (44,798).


Open: Mixed. Early trade has backed away from the strong triple-digit support seen midweek. This is leaving the complex in a narrow to moderate trading range from 40 cents lower to 20 cents higher. Little long-term direction is expected to be seen through the morning as traders cover positions seen over the last couple of days. Outside market direction is likely to play a stronger role in overall livestock trade and is expected to impact lean hog markets. Cash hog trade Thursday is $1 to $2 higher per cwt. Most bids are $1.50 higher. Open interest Wednesday added 3,068 positions (238,388). Spot month June fell 610 positions (9,612) and July fell 4,684 positions (44,695). Cash lean index for 6/12 is $78.71, up 1.33. DTN projected slaughter for Thursday is expected to be 445,000 head. Saturday runs are expected to be seen at 23,000 head.

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


Rick Kment