DTN Before The Bell-Livestock

Mixed Trade Keeps Volume Limited

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

Mixed trade is seen through most livestock trade early Thursday morning. The focus on initial trade activity adjusting positions following market shifts midweek is taking precedent over long-term market trends. This could add some additional uncertainty through the entire complex. Corn prices are lower in light trade. Stock markets are mixed, Dow Jones is 11 points lower while Nasdaq is up 11 points.

LIVE CATTLE:

Open: Steady to 50 cents lower. Light to moderate pressure has quickly developed in live cattle trade Thursday morning, although there is limited interest moving into the market during the first few minutes of trade. The focus long-term beef market demand and the potential to pull away from the sharp losses seen in feeder cattle trade early in the week is helping to keep markets generally stable and trading within a narrow to moderate range. Cash cattle interest remains sluggish early Thursday morning, but packer interest should start to improve through the day. This being said, active trade may still not be seen until late Friday given the expected wide gap between bids and asking prices. Asking prices are resurfacing between $115 to $116 per cwt live basis, and $180 to $185 dressed. Open interest Wednesday gained 1,725 positions (303,060). Spot-month August contracts lost 904 positions (15,807) and October contracts added 1,718 positions (131,403). DTN projected slaughter for Thursday is 120,000 head.

FEEDER CATTLE:

Open: Mixed. Early trade is backing away from midweek gains in most contracts, although mixed price shifts are seen through the complex. This is adding to the overall market uncertainty as the choppy market shifts seen through the week seem to be causing some uncertainty about longer-term direction. Early trade is hovering in a narrow range from 40 cents lower to 10 cents higher, although it is likely that additional market volume moving into the complex Thursday morning could back away from midweek market support.

A significant market shift has been seen between early morning trade and late day movement through the entire week, which is likely to add even more volatility and could change the direction of trade during the end of the session Thursday. Cash index for 8/7 is listed at $150.56 up 0.50. Open interest Wednesday lost 1,966 positions (53,198).

LEAN HOGS:

Open: Mixed. Initial trade movement in the lean hog complex is holding prices mixed in a narrow trading range. The overall lack of support seen through the week has added to overall market pressure as traders see no significant change in overall direction due to the inability to find market support at the lower price levels. A couple of deferred contracts are trading higher, based more on short covering opportunities than any significant market direction change. Prices are hovering from 30 cents lower to 20 cents higher, although the general tone of the market remains weak. Cash hog trade Thursday is $1 to $2 lower per cwt. Most bids are $2 per cwt lower. Open interest Wednesday fell 1,497 positions (239,157). Spot month August fell 949 positions (10,577) and October eroded 557 positions (119,185). Cash lean index for 8/7 is $63.17 down 1.47. DTN projected slaughter for Thursday is at 463,000 head. Saturday runs are expected at 135,000 head.

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

(SK)

Rick Kment