DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock markets are lightly traded in the early minutes of trade with firm gains redeveloping in feeder cattle and lean hog trade. This underlying support may continue to spark aggressive buying through the hog complex through the rest of the morning. Corn markets are higher in light early trade. Stock markets are higher. Dow Jones is 11 points higher with Nasdaq up 12 points.

LIVE CATTLE:

Open: Steady to 30 cents higher. Limited activity is seen early Thursday morning in live cattle trade. This is expected to cause some uncertainty as overall market interest is likely to remain subdued through most of the session. With March Madness on the minds of many across the country, the next two days will be filled more with basketball games than overall market direction. Although traders will continue to focus on short-term fundamental direction, overall sluggish volume in the complex could add potential volatility to the entire market. Cash cattle market activity is still at a standstill with bids nowhere to be found at this point. It is expected that active trade will likely be delayed until sometime Friday, and likely following the cattle on feed report. Asking prices are holding at levels seen earlier in the week given the support in futures trade. Open interest Wednesday added 6,855 positions (450,431). Spot month April contracts lost 1,868 positions (67,980) and June contracts added 4,029 positions (199,640). DTN projected slaughter for Thursday is 117,000 head.

FEEDER CATTLE:

Open: 30 to 70 cents higher. Light to moderate buyer support is steadily moving into feeder cattle trade with March futures quickly moving back into the complex. Although the focus on overall supply levels continues to be the main driver at this point, the expectation that traders have already adjusted the upcoming cattle on feed report given the recent market support. Overall volume is expected to slow significantly through the last half of the week with more outside market activity the focus of traders attention than movement in the cattle complex. Cash index for 3/19 is $137.41 down $0.26. Open interest Wednesday added 1,350 positions (52,885).

LEAN HOGS:

Open: Steady to $1 higher. Firm buyer support quickly moved through lean hog trade early Thursday morning as traders continue to adjust prices higher following limit moves higher Wednesday. The underlying market support continues to focus on potential long-term support through the complex. Although moderate sales to China were reported in the export sales report, this seemed to take the emphasis off of the aggressive buying seen the previous week. This will still bring about some increased overall support to the market, but initial trade remains subdued for now. Cash hog trade is steady to $2 higher. Most bids are $1 higher. Open interest added 3,339 positions (276,101). April fell 874 positions (33,951) and June slipped 977 positions (81,590). Cash lean index for 3/19 is $59.22 up $1.68. DTN projected slaughter for Thursday is 477,000 head. Saturday runs are expected near 169,000 head.

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

(BAS)

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