DTN Before The Bell-Livestock

Hog Futures Push Higher Thursday

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

Mixed trade is seen in livestock futures with nearby cattle futures and lean hog futures moving firmly higher. The follow through buying support in live cattle trade may help to spark some additional long term firmness in the market following triple-digit gains seen Wednesday. Hog markets are focusing on short covering activity after setting contract lows earlier in the week. Corn prices are higher in light trade. Stock markets are lower, Dow Jones is 140 points lower while Nasdaq is down 40 points.

LIVE CATTLE:

Open: Mixed. Light follow-through support is slowly trickling back into the complex Thursday morning with gains in summer and fall contracts holding a 10 to 20 cent gain. But the rest of the complex is under light pressure as prices are 10 to 50 cents lower. Most of the losses in the complex are not associated with market changes, but the ability for traders to take positions and potentially draw additional market support back into the complex. This may help to spark some additional underlying support into the complex with increased support possible later in the trading day. Cash cattle interest still remains sluggish, but bids are redeveloping in the same range as seen over the last couple of days. Live bids are resurfacing at $108 per cwt, while dressed bids are at $173 per cwt. Asking prices are holding around $114 or higher and $180 to $183 per cwt. Open interest Wednesday gained 605 positions (321,189). Spot month August contracts lost 3,318 positions (66,813) and October contracts added 1,787 positions (121,761). DTN projected slaughter for Thursday is 120,000 head.

FEEDER CATTLE:

Open: Mixed. Narrow trading ranges have developed early Thursday morning with the strong move in futures trade midweek has caused many traders to back away from the complex. Even though the tone of the market remains extremely firm, the inability for aggressive trade support to move back into the market has caused a market pause in most contracts. This could add some additional market shifts early in the session, although market firmness is expected to redevelop through the end of the session. Cash index for 7/17 is listed at $148.59 up 0.12. Open interest Wednesday added 2,015 positions (49,979).

LEAN HOGS:

Open: 15 to 60 cents higher. Light to moderate support is seen in lean hog futures as traders try to bounce back from contract lows which continue to develop in nearby contracts. Even though prices continue to remain extremely weak, there is some uncertainty as to how much additional market pressure will develop over the near future as traders are focusing on the ability to cover short positions. Cash hog trade Thursday is steady to $1.00 lower per cwt. Most bids are 50 cents to $1 lower. Open interest Wednesday gained 1,283 positions (234,494). Spot month August fell 2,875 positions (37,697) and October gained 3,344 positions (108,391). Cash lean index for 7/17 is $79.15 down 0.54. DTN projected slaughter for Thursday is at 458,000 head. Saturday runs are expected to hit 123,000 head.

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

(SK)

Rick Kment