DTN Livestock Open: Mixed Early Trade Expected

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Cattle: Steady to $2 Lower Futures: Mixed Live Equiv: $143.26 -0.11*
Hogs: Steady Futures: Mixed Lean Equiv: $ 89.84 -2.24**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue

GENERAL COMMENTS: 

Cash cattle trade is well on its way following light trade in most areas Wednesday. Increased interest in the South and dressed trade in the North late day has likely set the tone on market prices, barring any significant shift in futures trade the next couple of days.

Live trade in the South developed at $114 to $115 per cwt, $1 to $2 per cwt lower than last week, while dressed trade is at $185 to $186, mostly $185 and steady with last week. Even though numbers are light, trade may be done through the South, although it is expected that additional live and dressed business will still develop in the North the next couple of days.

Futures trade is expected mixed with limited buying likely to develop in the complex. With the release of the April Cold Storage report posting moderate-to-firm reductions of beef in freezers, the emphasis once again moves to the current strong demand in the complex. This should offset bearish expectations in the upcoming Friday Cattle on Feed report.

Light trade is expected early Thursday morning with a combination of follow-through selling pressure being quickly met by short-covering as traders try to not only adjust positions ahead of the holiday weekend, but also focus on global market direction.

Continued concerns that a China trade deal may not be near has traders concerned that pressure will continue to develop. But the major question that still cannot be answered is how global pork demand will develop if China does not buy pork directly from the U.S. This continues to be the main point that keeps traders shifting directions the last couple of weeks.

Even with trade tensions with China, the need for pork supplies exists. If China buys large amounts of pork from other countries, at least a portion of that demand needs to be filled, and likely with U.S. pork supplies.

Cash trade is called steady to $1 lower Thursday morning with most bids steady. Expected slaughter Thursday is at 467,000 head. Saturday runs are expected at 43,000 head.

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