DTN Before The Bell-Livestock

Hog Futures Trickle Higher in Limited Trade

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

Narrow trading ranges are seen through the entire livestock complex with feeder cattle and hog futures pushing markets mostly higher in reaction to strong gains Thursday. The live cattle futures remains under light pressure based on uncertainty in fundamentals at the end of the week. Corn prices are lower in light trade. Stock markets are lower, Dow Jones is 24 points lower while Nasdaq is down 15 points.

LIVE CATTLE:

Open: Steady to $0.30 Lower. Limited movement is seen in live cattle trade early Friday morning with traders focusing on recent market shifts and strong nearby gains which developed Thursday. This could bring some stability to the market through the end of the week with the underlying tone of the market still firm following gains in early July. There still remains a lot of outside market uncertainty in the beef market, but this could be overshadowed by firming cash and wholesale beef values later in the day. Cash cattle trade is expected to become more evident through the day with bids redeveloping at $108 live and $175 dressed similar to levels earlier in the week. Asking prices are still well above these levels, at $114 to $115 live and $182 and higher dressed. Open interest Thursday slipped 454 positions (318,325). Spot month August contracts lost 6,869 positions (87,163) and October contracts added 2,644 positions (107,374). DTN projected slaughter for Friday is 117,000 head.

FEEDER CATTLE:

Open: Mixed. Losses in nearby feeder cattle futures are kept to a minimum as buyer support is returning to the complex in late 2018 contract months. Market activity is contained to a narrow trading range from 12 cents lower to 7 cents higher. It is uncertain which direction the market will move through the morning as both sides seem to be generally apathetic about quickly stepping back into the complex. This may add some back and forth price shifts through the week with feeder cattle traders focusing on both the direction of live cattle markets as well as movement in grain trade. Cash index for 7/10 is listed at $145.08 down 1.67. Open interest Thursday added 581 positions (47,097).

LEAN HOGS:

Open: Mixed. End-of-week positioning appears to be the main focus through lean hog trade following aggressive back-and-forth market shifts seen through the complex. Prices are hovering in a narrow to moderate range with nearby contracts, holding steady to 10 cent losses. The strong triple-digit support seen Thursday is helping to solidify buyer activity in fall and winter contracts as traders attempt to rebound from the most recent pressure through the complex. Cash hog trade Friday is steady to $1.00 lower per cwt. Most bids are $1 lower. Open interest Thursday added 672 positions (231,551). Spot month July fell 1,179 positions (7,790) and August slipped 5,067 positions (51,052). Cash lean index for 7/10 is $81.52 down 0.15. DTN projected slaughter for Friday is at 440,000 head. Saturday runs are expected to be seen at 38,000 head.

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

(SK)

Rick Kment