DTN Before The Bell-Livestock

Additional Pressure Floods Through Livestock Trade

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

Livestock futures have posted additional strong losses with traders focusing on the previous market pressure and additional concerns that trade volume may continue to develop over through the end of the week and push prices even lower. This is keeping buyers out of the market despite some stability expected in market fundamentals. Corn prices are higher in light trade. Stock markets are lower, Dow Jones is 175 points lower while Nasdaq is down 38 points.

LIVE CATTLE:

Open: 60 to 90 cents lower. Firm losses have developed in nearby live cattle trade with very limited trade volume seen in the opening minutes of activity Friday. But the underlying weaker tone that has started to develop over the last couple of days is definitely expanding, and could spark some additional pressure through the end of the week. Most buyers are unwilling to step into the weaker market at this point as there seems to be very little momentum to sustain market support or even price stability through the end of the week. Cash cattle trade is still at a standstill with a few bids redeveloping in the same range as seen earlier in the week. Bids are seen at $110 live in all areas. Asking prices still remain near $115 and higher live and $185 dressed. Interest is expected to improve through the morning, but it still may be late in the day before active trade develops. Open interest Thursday gained 979 positions (333,816). Spot month June contracts lost 1,402 positions (8,931) and August contracts added 290 positions (152,870). DTN projected slaughter for Friday is 118,000 head.

FEEDER CATTLE:

Open: $1 to $1.50 lower. Sharp triple-digit losses have quickly moved back into the feeder cattle futures complex with August futures holding a $1.12 per cwt loss with additional market softness developing in all trade. The lack of support in live cattle trade could continue to push prices lower during the morning. Cash index for 6/13 is listed at $140.70 down 0.30. Open interest Thursday added 619 positions (45,399).

LEAN HOGS:

Open: Steady to 50 cents lower. Firm follow-through pressure has quickly developed in lean hog trade early Friday morning. The combination of additional losses in cattle markets and the previous triple-digit losses seen Thursday has caused additional trader weakness to develop in all futures. August contracts are leading the market lower, with additional pressure likely to step into the market as traders look for protection at the end of the week. Cash hog trade Friday is $1 lower to $2 higher per cwt. Most bids are $1.00 higher. Open interest Thursday fell 825 positions (237,420). Spot month June fell 202 positions (9,299) and July fell 3,267 positions (41,414). Cash lean index for 6/13 is $80.09, up 1.86. DTN projected slaughter for Friday is expected to be 415,000 head. Saturday runs are expected to be seen at 23,000 head.

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

(SK)

Rick Kment