Moderate to firm losses have quickly developed Friday morning. This is adding to the overall uncertainty in the complex as traders adjust to lower prices at the end of the week. Corn prices are higher in light trade. Stock markets are mixed, Dow Jones is 12 points lower while Nasdaq is up 19 points.
Open: Steady to 40 cents lower. Light losses are expected to continue to develop across the live cattle complex with increased overall weakness seen through the entire livestock market. There is very limited direction expected to be seen through the end of the session, although traders are likely to adjust to the upcoming cattle on feed report. Limited activity is expected to be seen through most of the morning as traders focus not only on cattle market fundamentals, but outside market direction at the end of the week. Cash cattle activity is quiet, although packer interest is expected to increase through the day. That being said, active trade could easily be delayed until after the afternoon release of the cattle on feed report. Asking prices are holding around $114 or higher and $180 plus. Open interest Thursday slipped 2,621 positions (317,963). Spot-month August contracts lost 3,581 positions (63,138) and October contracts fell 740 positions (120,893). DTN projected slaughter for Friday is 117,000 head.
Open: $1 lower. Firm pressure has quickly developed across all cattle trade with feeder cattle markets leading the complex lower with $1 per cwt losses. Traders are looking ahead to the afternoon release of the cattle on feed report. The average market estimate is pegged at 101.3% placement from year ago levels although the range remains moderate wide, over a 10% gap. The previous gains early in the week across the complex have also played a part in the market expectations following the report, which may leave traders doing final adjustments through the morning. Cash index for 7/18 is listed at $148.31 down 0.28. Open interest Thursday added 875 positions (50,811).
Open: 50 to 80 cents lower. Any indication of market support that attempted to trickle into the complex Thursday seems to be a memory at this point with sellers quickly redeveloping Friday morning as prices are holding firm losses in nearly all contract months. This pullback from what appeared to be an attempt to add stability into the market is likely to spark additional technical and fundamental pressure through the end of the week. Traders are looking at moderate to strong cash and pork pressure which will likely add to the uncertainty in all markets. Cash hog trade Friday is steady to $2.00 lower per cwt. Most bids are 50 cents to $1 lower. Open interest Thursday fell 2,421 positions (230,477). Spot month August fell 2,413 positions (35,259) and October gained 2,779 positions (110,820). Cash lean index for 7/18 is $78.62 down 0.53. DTN projected slaughter for Thursday is at 433,000 head. Saturday runs are expected to hit 125,000 head.
Rick Kment can be reached at firstname.lastname@example.org
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