DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate trade shifts are developing early Thursday morning with little direction developing following wide midweek swings. Additional position taking is being seen in both cattle and hog futures with live cattle and lean hog futures under light to moderate pressure in opening trade. Corn markets are lower in light early trade. Stock markets are mixed. Dow Jones is 53 points lower with Nasdaq up 30 points.

LIVE CATTLE:

Open: steady to 20 cents lower. Limited pressure is slowly developing Thursday morning in live cattle trade as traders back away from the support seen midweek. Traders are focusing on the pressure in hog trade, as well as potential for light to moderate weakness in beef values in the near future as traders become more cautious about longer-term demand. Cash cattle markets still remain sluggish and likely will remain that way through most of the day. A few bids were restated at $122 in the South, although this is well below asking prices of $126 and unlikely to get much attention at this point of the week. Open interest Wednesday slipped 194 positions (388,942). Spot-month February contracts slipped 2,789 positions (54,405) and April contracts added 1,198 positions (155,123). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: 30 to 80 cents higher. Follow-through buying has quickly stepped back into the feeder cattle trade early Thursday morning. The overall lack of caution in the market is allowing front-month January futures to lead the complex higher with increased support. All nearby feeder cattle futures remain in a tight trading range any significant premium taking out of the market through early summer. This could bring about increased support in nearby contracts based on upcoming cattle supply levels. Cash index for 1/22 is listed at $141.58 down $0.04. Open interest Wednesday fell 206 positions (51,437).

LEAN HOGS:

Open: 20 to 40 cents lower. Light spillover pressure is slowly developing across lean hog trade. This is focusing on the continued pressure in pork values as traders adjust to lower market direction. Limited activity is seen in all contract months, which could help to allow for buying activity through the later hours of trade Thursday, but the underlying weak market trend is likely to be still unable to spark sustained market support given concerns of longer-term supply issues. Cash hog trade is steady to $1 lower. Most bids are steady. Open interest added 1,833 positions (207,198). February fell 2,240 positions (26,868) and April added 1,740 positions (84,520). Cash lean index for 1/22 is $58.58 up 0.25. DTN projected slaughter for Thursday is 477,000 head. Saturday runs are expected to be 212,000 head.

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

(BAS)

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