DTN Before The Bell-Livestock

Firm Follow-Through Support Seen in Cattle Trade

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

Firm follow-through buyer support is seen in the cattle market. This is expected to help draw additional interest into the entire complex. There may continue to be some additional buyer activity seen in deferred contracts based on investment support through the trade activity developing. Corn futures are trading higher in light early trade. Stock markets are mixed in light trade. Dow Jones is 11 points higher, while Nasdaq is down 18 points.

LIVE CATTLE:

Opening call: 50 to 70 cents higher. Buyer interest is developing into the market, which may help to step back into the complex and could spark some additional triple-digit gains early in the session, but the ability to sustain gains is the main question that will be unanswered through the early part of the trading session. Traders will continue to focus on buyers and interest in beef market support through the upcoming days. Cash cattle markets still quiet with bids still undeveloped Thursday morning, although packers are expected to get busy as the day progresses. It is not likely that business will be done before Friday. Open interest Wednesday added 591 positions (277,147). Spot February fell 2,572 positions (28,360) and April contracts gained 1,361 positions (118,443). DTN projected slaughter for Thursday is 109,000 head.

FEEDER CATTLE:

Opening call: 50 cents to $1 higher. Follow-through buyer support is expected to develop through the feeder cattle complex. This is likely to help draw increased market interest into the complex through the rest of the morning as traders look for additional support, but additional interest may be slow to develop through the rest of the morning. Open interest Wednesday lost 522 positions (36,865). Cash index for 2/2 is 160.14 down 0.14.

LEAN HOGS:

Opening call: Mixed. Lack of market direction is expected to be seen through most of the morning Thursday with traders taking a sideways market shift during early trade. Nearby contracts are hovering on either side of unchanged with prices from 20 cents lower to 20 cents higher with the focus. Trade is expected to remain light, but hover in the same narrow range through most of the morning. Cash bids are expected to be steady. Open interest Wednesday added 1,889 positions (185,275) Spot month February fell 1,840 positions (21,285) and April added 900 positions (76,413). Cash lean index for 2/2 is 63.30, up 0.79. DTN projected slaughter for 405,000 head with 198,000 head expected Saturday.

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

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Rick Kment