DTN Before The Bell-Livestock

GENERAL COMMENTS

Narrow trading ranges have developed early Thursday morning with limited losses seen in most cattle and hog futures. Traders in feeder cattle futures are adjusting markets lower based more on position squaring than any change in trade interest or intentions at the end of the week. Corn markets are lower in light early trade. Stock markets are mixed. Dow Jones is 16 points higher with NASDAQ down 10 points.

LIVE CATTLE:

Open: Mixed. Light trade has continued in live cattle trade with traders focusing not only on the end-of-week direction in beef values and cash cattle trade, but outside market moves continue to be a major focus through the first week of June. Recent shifts in grain trade has continued to add uncertainty to the entire complex. Nearby live cattle futures are holding losses of 10 to 20 cents per cwt just after opening bell. This narrow trading range is likely to limit additional movement through the morning. The continued unrest with added tariffs on China and Mexican products is likely to leave traders uncertain through most of the morning, but keeping prices within a tight trading range. Cash cattle bids are redeveloping in the North with light dressed bids of $183 seen. Following earlier week trade, it is likely that most if not all of the business in the South is done with the focus on dressed business in the North developing over the next couple of days. Asking prices are at $114 live and $185 dressed. Open interest Wednesday fell 111 positions (373,087). Spot month June contracts lost 4,103 positions (31,739) and August contracts added 1,184 positions (155,555). DTN projected slaughter for Thursday is 122,000 head.

FEEDER CATTLE:

Open: Steady to 50 cents lower. Light to moderate pressure is seen in nearby feeder cattle trade with position squaring the main focus during initial trade Thursday. The overall lack of support is a reaction to markets regaining over $6.50 per cwt in nearby trade since the beginning of the month. Although the complex remains oversold, and has additional room for upward market potential, light trade Thursday is focusing more on adjustments and taking profits than any significant market target. Cash index for 6/4 is $131.88 down $0.07. Open interest Wednesday fell 893 positions (48,625).

LEAN HOGS:

Open: Mixed. Narrow trading ranges have developed early Thursday morning with increased pressure likely to be seen through most contracts following the inability to spark additional upward movement in nearby contracts over the last couple of sessions. Traders are focusing on direction of outside markets as well as potential end of the week shifts in pork cutout values, which have struggled to show significant seasonal support through the last couple of weeks. Cash hog trade is called steady to $2 lower with most bids steady. Open interest added 3,364 positions (315,316). June liquidated 1,358 positions (14,665) and July liquidated 1,139 positions (74,280). Cash lean index for 6/4 is $80.67, down 0.23. DTN projected slaughter for Thursday is 476,000 head. Saturday runs are expected at 50,000 head.

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

(CZ)

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