DTN Before The Bell-Livestock

GENERAL COMMENTS

Sharp losses quickly developed once again in cattle futures with feeder cattle markets leading the complex lower as prices are $2 to $3 per cwt lower during early trade. The renewed support in grain trade focusing on reduced production expectations is causing aggressive pressure through the entire livestock market. Corn markets are higher in active early trade. Stock markets are higher. Dow Jones is 52 points higher with NASDAQ up 37 points.

LIVE CATTLE:

Open: $1 to $1.50 lower. Strong pressure is moving into live cattle trade Thursday morning following increased pressure through the feeder cattle complex. Strong double-digit gains in corn prices once again focusing on reduced production levels has sparked active underlying pressure through the entire cattle complex based on higher production costs and concern about securing feed supplies in the coming months. Cash cattle activity remains light early Thursday morning with packer interest expected to become more evident as the day continues. Light trade developed in the North with dressed deals at $185 to $186 per cwt. This is $1 to $2 per cwt higher than last week, but not enough cattle to establish a general trend. Asking prices are redeveloping at $115 and higher live and $188 dressed. Open interest Wednesday fell 2,523 positions (360,208). Spot-month June contracts lost 1,081 positions (16,227) and August contracts fell 2,662 positions (154,082). DTN projected slaughter for Thursday is 122,000 head.

FEEDER CATTLE:

Open: $2 to $3 lower. Sharp triple-digit losses have quickly swept through feeder cattle trade with traders still concerned about the overall direction in corn markets and access to reliable and quality feed supplies through the end of the year and during 2020. This is sparking pressure in both futures and cash market trade with traders concerned about further impacts to the entire livestock market. Cash index for 6/11 is $133.11 up $0.22. Open interest Wednesday lost 41 positions (48,144).

LEAN HOGS:

Open: Steady to $1 lower. Moderate pressure is developing in lean hog trade once again with lightly trade June contracts steady following opening bell, but other nearby trade is posting losses at or near $1 per cwt. The growing concern of challenges when it comes to long-term pork exports is being clouded by the trade issues with China. Even though limited pork sales were reported to China last week, the focus on open access to the market has been hampered with tensions and tariffs. This is creating more concerns about not only being able to get into the China market long term, but continued access to other areas in Asia and other global markets. Cash hog trade is called steady to $1 lower with most bids steady. Open interest fell 3,442 positions (308,807). June liquidated 515 positions (10,656) and July lost 5,529 positions (49,423). Cash lean index for 6/11 is $79.39, down 0.45. DTN projected slaughter for Thursday is 478,000 head. Saturday runs are expected at 68,000 head.

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

(CZ)

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