DTN Before The Bell-Livestock

Mixed Prices Thursday

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

Mixed trade has continued to be seen in cattle markets with traders looking for additional longer-term direction, although the inability to break out of the current range may keep markets subdued through most of the day. Firm gains have been seen in lean hog futures, although trade remains limited early Thursday. Corn prices are mixed in light trade. Stock markets are mixed, Dow Jones is 42 points higher while Nasdaq is down 21 points.

LIVE CATTLE:

Open: Mixed. Live cattle futures are holding narrow trading ranges with prices hovering from 10 cents lower to 12 cents higher. The overall lack of direction in the complex continues to spark some underlying interest back into the complex following light to moderate pressure midweek. Live cattle futures continue to hold in the sideways trading range seen over the last couple of months with the wide market range allowing traders to step in and out of the market without triggering any fundamental or technical market decisions. Cash cattle markets remain sluggish early Thursday morning with bids becoming more available. A few scattered bids developed in the North Wednesday afternoon at $170 to $171 per cwt. This is not enough business to establish a market trend, but it has started the ball rolling. Packer interest is expected to continue to improve through the day. Bids are seen in a wide range from $103 to $106 live basis and $170 dressed. Asking prices still remain well above this level at $110 to $111 live and $174 and higher dressed. Open interest Wednesday gained 281 positions (305,570). Spot month October contracts lost 4,424 positions (110,921) and October contracts added 2,429 positions (81,021). DTN projected slaughter for Thursday is 119,000 head.

FEEDER CATTLE:

Open: Mixed. Strong buyer support has continued to move into feeder cattle futures. The overall lack of direction in feeder cattle futures through the end of the session Wednesday has allowed for another lackluster move early Thursday. It is expected that very little market direction will be seen through the market with nearby contracts holding narrow gains of 20 to 25 cents per cwt. Single-digit losses are seen in deferred contracts, although the lack of direction through the entire complex may keep markets sluggish through most of the day Thursday. Cash index for 9/4 is listed at $150.60, down 0.02. Open interest Wednesday added 653 positions (49,087).

LEAN HOGS:

Open: 50 cents to 85 cents higher. Light to moderate buyer support is slowly moving back into lean hog trade. This is helping to spark some additional buyer support through the morning, although there may be some additional volatility as traders try to position holdings during early September. October futures are holding an 85 cent gain, leading the complex higher in the first few minutes after opening. Cash hog trade Thursday is expected steady to $1 Lower. Most bids are steady to 50 cents lower. Open interest Wednesday lost 1,971 positions (231,048). Spot-month October gained fell 3,463 positions (90,487) and December added 83 positions (68,659). Cash lean index for 9/4 is $45.67 up 0.23. DTN projected slaughter for Thursday is at 469,000 head. Saturday runs are expected at 343,000 head.

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

(SK)

Rick Kment