DTN Before The Bell-Livestock

GENERAL COMMENTS

Live cattle futures are mixed in a narrow, single-digit range early Thursday as traders look for additional direction. Hog market pressure is noted as traders adjust positions following aggressive market support early in the week. Corn markets are lower in light trade. Stock markets are higher. Dow Jones is 116 points higher with NASDAQ up 5 points.

LIVE CATTLE:

Open: Mixed. Single-digit trading ranges Thursday morning with prices mixed in a narrow range. The overall lack of movement does not offset previous market support and the optimism through the complex that may develop over the near future. Limited volume seen early Thursday is expected to improve as the day continues. Cash cattle activity is still quiet. Bids are expected to redevelop in similar ranges as Wednesday, around $180 dressed basis. Asking prices remain firm and are unlikely to back away given recent bullishness in the entire complex. Cash trade may be delayed until Friday in most areas. Open interest Wednesday lost 2,694 positions (336,501). Spot month August contracts lost 12,062 positions (103,184) and October contracts added 3,071 positions (116,808). DTN projected slaughter for Thursday is 121,000 head.

FEEDER CATTLE:

Open: Steady to $1 higher. Light to moderate buyer support is slowly but steadily moving through the feeder cattle complex. The strong market rally early in the week helped spark additional buyer activity which may add increased underlying support through the entire complex. The focus on stability in the corn market early Thursday and the potential to break through additional resistance levels in nearby trade are helping solidify buyer interest. Cash index for 7/8 is $135.44, up 1.07. Open interest Wednesday lost 457 positions (49,636).

LEAN HOGS:

Open: Steady to $1 lower. Firm pressure in lean hog trade early Thursday morning as traders take the opportunity to square positions following the aggressive gains earlier in the week. Nearby futures are holding $1 per cwt losses, although the overall firm tone over the last two days is expected to continue as increased volume moves back into the complex. Very limited sales to China were reported in the export sales report, with a total export sales last week at 11,300 metric tons. More focus on pork values is expected through the end of the week. This could help break out of the recent trading range. Cash hog trade is called $1 lower to $1 higher, with most bids steady. Open interest fell 5,208 positions (281,372). July fell 1,597 positions (14,243) and August lost 4,237 positions (70,245). Cash lean index for 7/8 is $71.25, down 0.67. DTN projected slaughter for Thursday is 477,000 head. A 38,000 head Saturday run expected.

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

(CZ)

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