DTN Before The Bell-Livestock

GENERAL COMMENTS

LIVE CATTLE:

Open: 2 cents higher. August cattle are down $0.52 early with no sign of concern about heat advisories and excessive heat warnings in the central and southern U.S. Plains, which will be especially stressful to livestock and people. The old support level of $111.00 is the source of new resistance and also coincides with the 100-day average, but prices haven't even reached that level yet and are already struggling. It remains difficult to see much upside potential while supplies appear adequate and the economy is expected to be slower in the second half of 2019, however four days of extreme heat could offer some help later. There has been no activity on cash cattle yet this week. No bids have yet been quoted and cattle are offered at $187 in the North. So far, boxed beef prices are a little lower this week. USDA estimated Tuesday's slaughter at 121,000, up from 120,000 a year ago and Dow Jones expects the same level on Wednesday. Total open interest was down 2,065 at 328,630 on Tuesday's lower trade. August contracts fell 4,203 to 61,820 and October increased 1,569 to 146,131.

FEEDER CATTLE:

Open: 45 cents lower. August feeder cattle are down $1.32 early, also ignoring hot temperatures stressing livestock in the central and southern U.S. Plains. Corn prices are a nickel higher early Wednesday after falling the past two days on forecasts for milder temperatures after this weekend. However, all the talk of milder temperatures first has to get past the next four days of extreme heat. Technically speaking, the chart for August feeder cattle is similar to live cattle with the old level of support now offering resistance at $146.00 and the 100-day average doing the same at $147.00. The Feeder Cash index for July 15 is listed at $141.16, up $5.28 from a week ago. Total open interest declined 270 to 48,298 on Tuesday's lower trade.

LEAN HOGS:

Open: 90 cents higher. August hogs are up $1.50 early Wednesday, holding consistently above their June lows with plenty of unanswered concerns yet about the state of the world's pork supplies. On a weekly chart for October hogs, it appears prices found support near roughly $68 and the weekly stochastic is now turning higher. On Monday, Dow Jones cited Chinese authorities as saying the sow herd is now down 27% from a year ago. USDA estimated Tuesday's hog slaughter at 475,000, up from 459,000 a year ago. For Wednesday, Dow Jones expects 474,000 hogs slaughtered. The Lean Hog Index for July 15 was estimated at $70.62 down $0.63 from a week ago. Cash hog trade is expected to be steady early Wednesday as pork carcass values rebounded Tuesday and are now up roughly $4.00 from Friday. Total open interest was down 1,200 to 285,464 on Tuesday's lower trade. Open interest in the August contract was down 5,377 at 44,840 while October contracts were up 1,510 at 94,929.

Todd Hultman can be reached at Todd.Hultman@dtn.com

(CZ)

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