DTN Before The Bell-Livestock

Limited Volume Leaves Prices Mixed

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

Mixed trade is seen in livestock futures with limited direction likely to be seen through the entire Friday session. The back-and-forth shifts in cattle and hog markets through the week is allowing most traders to focus on position taking at the end of the week. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 67 points higher while Nasdaq is up 35 points.

LIVE CATTLE:

Open: Mixed. Early trade remains extremely sluggish in all livestock markets with live cattle trade seen from 30 cents lower to 45 cents higher. Traders seem to be focusing less on longer term market moves, and more on the ability to square positions following narrow to moderate market shifts over the last couple of trading sessions. This may limit overall movement in futures trade, but outside markets and cash cattle trade may bring some limited interest back into the complex. Cash cattle activity remains sluggish following light to moderate trade seen earlier in the week. Although most of the trade was seen in the North, it is expected that some additional movement will develop through the day, especially in the South. Prices settled steady in the north to $1 to $1.50 per cwt lower in the South, while the overall trade seen at this point likely setting the tone for the market. Open interest Thursday added 952 positions (296,141). Spot month August contracts lost 788 positions (3,642) and October contracts lost 216 positions (123,964). DTN projected slaughter for Friday is 117,000 head.

FEEDER CATTLE:

Open: Mixed. Limited activity is seen early Friday morning as traders seem to be focusing on sluggish end-of-week market direction. This could keep market interest limited through most of the day, although the ability to bring some light to moderate price support to nearby contracts through the end of the session is likely to help spark some longer-term stability. Light volume is likely to be seen through most of the morning, although outside market direction is expected to play a larger role in overall market moves. Cash index for 8/22 is listed at $150.64, up 0.90. Open interest Thursday fell 229 positions (48,930).

LEAN HOGS:

Open: Mixed. Early trade has continued to hold narrow trading ranges in a mixed market shift. This may add some additional market volatility through the end of the week, although at this point, it is expected that most traders will remain on the sidelines until early next week. Nearby contracts have held light to moderate losses of 12 to 45 cents per cwt with deferred contracts holding gains of 5 to 50 cents per cwt. Additional price movements may move back into the complex during late morning, but traders are looking for stability through the end of the week. Cash hog trade Friday is expected steady to $1 lower per cwt. Most bids will be $1 lower. Open interest Thursday added 157 positions (224,046). Spot-month October fell 964 positions (106,460) and December added 467 positions (58,039). Cash lean index for 8/22 is $49.50 down 0.51. DTN projected slaughter for Friday is at 460,000 head. Saturday runs are expected at 217,000 head.

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

(SK)

Rick Kment