DTN Before The Bell-Livestock

Mixed Trade Limits Market Direction

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Narrow trading ranges are seen in most livestock trade with August live cattle futures attempting to cover short positions seen Wednesday. Hog futures remain mixed in a narrow range as traders continue to adjust to potential production gains while still holding out hope for a China trade deal in the near future. Corn markets are higher in light trade. Stock markets are higher. Dow Jones is 234 points higher with NASDAQ up 86 points.

LIVE CATTLE:

Open: Mixed. Steady to firm buyer support is moving in nearby trade as traders react to the midweek pressure that eroded spot market contracts. But the lack of consistency through the entire complex is leaving prices vulnerable for additional market pressure and swift selling through the session. Traders continue to search for additional direction from beef values and cash market trade through the end of the week, but overall volume is likely to remain extremely sluggish. Cash cattle interest remains sluggish with just a few bids on the table Thursday morning. It is expected that packer interest will increase, but may not see significant interest until Friday. Asking prices are holding at $112 to $115 live and $185 and higher dressed. Open interest Wednesday slipped 298 positions (351,675). Spot month June contracts lost 1,687 positions (8,557) and August contracts fell 830 positions (148,404). DTN projected slaughter for Thursday is 122,000 head.

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FEEDER CATTLE:

Open: Steady to 40 cents lower. Firm pressure is once again moving into feeder cattle trade Thursday. Traders are not only concerned with the pullback in all cattle trade midweek, but the renewed support in corn markets is putting the emphasis back on feed price concerns. The ability to bring additional movement back to the complex continues to add increased concerns about long term market support, even though the feeder cattle market remains entrenched in a wide sideways trend. Cash index for 6/18 is $133.02 down $0.19. Open interest Wednesday added 339 positions (48,538).

LEAN HOGS:

Open: Mixed. Narrow trading ranges are seen early Thursday morning with a combination of follow through buyer support and position taking developing in the early minutes of trade. This may add increased market shifts later in the day, although traders continue to focus on the potential for increased support based on hopes that trade talks with China next week will bring about positive results. Cash hog trade is called steady to $1 lower with most bids steady. Open interest fell 8,320 positions (296,950). June reduced 4,088 positions (0) and July lost 4,073 positions (30,702). Cash lean index for 6/17 is $79.26, down 0.01. DTN projected slaughter for Thursday is 477,000 head. Saturday runs are expected at 88,000 head.

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

(CZ)

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Rick Kment