DTN Before The Bell-Livestock

Active Pressure Develops Early Friday

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

Increased overall support has been hard to find early Friday with firm losses redeveloping in most livestock complex. The triple digit losses that swept through the complex Thursday afternoon has continued to create doubt about short term buying interest developing in the market. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 45 points higher while Nasdaq is up 2 points.


Open: Mixed. Initial trade moves Friday morning are separated between nearby gains and deferred pressure with markets holding a moderate trading range despite limited trade activity. The overall lack of support in the complex may add some uncertainty to the entire market. October futures are leading the complex higher with a 47 cent gain with traders trying to recover from sharp triple-digit losses Thursday. There may be some additional longer-term support redeveloping during early August as the long term tone of the market has not yet changed. Cash cattle interest remains sluggish early Friday morning, although with packers needing to get access to moderate numbers of cattle for next week's procurements, more interest is likely to be seen in the near future. Bids have moved very little from early in the week, with live bids of $109 to $110 per cwt while dressed bids are at $176 per cwt. Asking prices remain at $115 and higher live and $183 dressed. Open interest Thursday gained 410 positions (313,753). Spot month August contracts lost 3,823 positions (45,124) and October contracts added 1,361 positions (125,969). DTN projected slaughter for Friday is 117,000 head.


Open: Mixed. Follow through pressure is seen in most contracts Friday morning with prices ranging from 55 cents lower to 15 cents higher in light early trade. The swift adjustment to the market tone seen Thursday as prices tumbled sharply lower has created some uncertainty through the entire market. The focus on end of the week position squaring may help to draw some limited short covering back into the market. But overall trade is likely to remain under pressure Friday. Cash index for 7/25 is listed at $149.21 up 1.04. Open interest Thursday added 204 positions (54,554).


Open: Steady to 50 cents lower. Firm pressure is seen through lean hog futures trade following the triple-digit losses that quickly developed Thursday. The focus on buyers moving back into the complex has continued to see limited interest as traders are trying to adjust positions through the end of the week. August futures are leading the complex, but early light trade in the market has been hard to determine just how much additional pressure may develop through the end of the session. Cash hog trade Thursday is $1 to $2 lower per cwt. Most bids are $2 lower. Open interest Thursday lost 2,035 positions (237,990). Spot month August fell 3,191 positions (25,630) and October gained 59 positions (117,437). Cash lean index for 7/25 is $74.43 down 0.80. DTN projected slaughter for Friday is at 325,000 head. Saturday runs are pegged at 51,000 head.

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


Rick Kment