DTN Before The Bell Livestock

GENERAL COMMENTS:

Strong gains seen in cattle trade focusing on outside market support which is bringing back increased buyer activity despite lower moving cash cattle trade during the week. Sharp triple-digit losses in nearby lean hog futures could further weaken the entire hog complex. Corn futures are trading higher in light trade. Stock markets are higher in limited morning trade. Dow Jones is 881 points higher with NASDAQ up 207 points.

LIVE CATTLE:

Open: Steady to 60 cents higher. Firm gains are seen in all live cattle futures early Tuesday. The focus on moderate to strong buying redeveloping in both August and October futures is helping to sustain additional buyer support with August futures holding prices above $96 per cwt with the expectation that increased support remains the focus as the week develops. Firm outside market support is helping to spark renewed buyer activity in all contract months. Cash cattle activity remains quiet Tuesday morning. But given the trend of trade trickling in through the week, it is likely that the lower cash cattle trade seen Monday will spark lead to additional activity in the upcoming days. Cash prices Monday were once again in a very wide range, making it hard to get a handle on how much lower the market trend is from last week's average, but weaker prices are likely to continue without any significant support from futures trade. Open interest added 2,432 positions (270,791). June contracts lost 761 positions (8,230) and August contracts gained 1,836 positions (129,402). DTN projected slaughter for Tuesday is 120,000 head.

FEEDER CATTLE:

Open: Steady to $1 Higher. Strong gains are holding in feeder cattle trade with the ability for live cattle trade to regain gains seen late Monday. August feeder cattle futures are leading nearby contracts with a $1.10 per cwt gain early Tuesday morning. The focus on nearby contracts hovering at $132 per cwt is giving limited support, but may not be able to secure strong follow through buyer support over the near future if significant gains are not realized in live cattle trade. Cash index for 6/12 is $128.51, down 1.09. Open interest Monday fell 72 positions (32,619).

LEAN HOGS:

Open: Mixed. Lean hog futures have turned sharply lower in nearby contracts although mixed trade is seen with light gains able to hold in deferred contracts. Summer and fall contracts are showing the most aggressive pressure, with July contracts nearly $2 per cwt lower as prices have dipped below $51 per cwt, testing long term support levels. If prices continue to hold current losses, further widespread pressure may develop through the entire complex during the rest of the week. Cash hog trade is called $1 lower to 50 cents higher. Most bids are steady to weak. Open interest fell 193 positions (224,712). July fell 2,204 positions (33,797) and August added 1,948 positions (80,031). Cash lean index for 6/12 is $48.37, down 0.59. DTN projected slaughter for Tuesday is 456,000 head. Saturday runs are expected near 288,000 head.

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

(c) Copyright 2020 DTN, LLC. All rights reserved.