DTN Before The Bell-Livestock

GENERAL COMMENTS

Narrow trading ranges have developed in all livestock trade Thursday morning. Narrow gains in lean hog futures are attempting to establish a market bottom in nearby contracts, while traders are slowly moving back into deferred contract months. Live cattle futures are mixed in a very narrow range with traders looking for stability following a challenging week of weather in the cattle market. Corn markets are lower in light early trade. Stock markets are mixed. Dow Jones is 116 points lower with Nasdaq up 64 points.

LIVE CATTLE:

Open: Mixed. Prices in live cattle trade are stuck within a very narrow range, from 15 cents lower to 15 cents higher as traders focus on the underlying developments of cash markets yet to develop this week as well as overall lighter gains and potential cattle losses seen in feed yards through the week. This will likely create some underlying support in the market which has posted firm gains during the week. But traders are also focusing on the warmer weather in the forecast, as well as positioning contracts ahead of month end. This is likely to leave markets mixed in a narrow range through the end of the day. Cash cattle markets has remained quiet early Thursday with bids still undeveloped. Packer interest is expected to improve through the day, although bids are likely to start out near $122 live and $195 dressed, and unlikely to gain much attention at this point. Asking prices are redeveloping and firming as the week goes along, with prices set at $126 to $127 live and $200 to $203 dressed. It still may be late Friday before the majority of cattle are traded. Open interest Wednesday increased 924 positions (388,766). Spot month February contracts slipped 3,544 positions (37,227) and April contracts added 2,486 positions (164,156). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 20 cents lower. Extremely narrow trading ranges have developed early Thursday with the overall lack of interest seen through the last couple of days continuing. With the extreme cold weather still moving through the Midwest and creating concerns that additional trade support may develop as the impact of this artic blast continues to be seen over the next couple of weeks. Feeder cattle futures are showing very little movement even though corn markets have opened lower Thursday. Cash index for 1/29 is listed at $142.99 down $0.09. Open interest Wednesday lost 236 positions (51,157).

LEAN HOGS:

Open: Mixed. Traders have been very sluggish when entering the market as the overall support in the complex continues to focus on recent market pressure and traders in the early minutes of activity Thursday squaring positions following midweek losses. The firm support seen Thursday is developing in fall and winter contract months, allowing for the potential for this strength to move into nearby trade. At this point, very little activity is expected to develop through the end of the day as traders are busy adjusting to month-end positions. Cash hog trade is steady to $1 lower. Most bids remain steady to weak. Open interest gained 1,304 positions (215,657). February lost 740 positions (22,228) and April added 1,247 positions (90,558). Cash lean index for 1/29 is $57.67 down $0.22. DTN projected slaughter for Thursday is 425,000 head. Saturday runs targeted at 310,000 head.

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

(BAS)

Copyright 2019 DTN/The Progressive Farmer. All rights reserved.