DTN Before The Bell Livestock

GENERAL COMMENTS:

Firm gains are scattered through livestock trade Tuesday morning with the focus on reduced meat stocks in the latest cold storage report. Limited activity is seen, which could allow for additional spillover buying through most of the morning. Corn futures are trading lower in light trade. Stock markets are higher in limited morning trade. Dow Jones is 199 points higher with NASDAQ up 90 points.

LIVE CATTLE:

Open: Steady to 60 cents higher. Firm gains are seen in August live cattle futures early Tuesday, although the overall lack of trade activity is keeping prices stuck within a narrow range during the first few minutes of trade. This may bring about additional short covering, although the long-term direction of the market may not be affected. Cash cattle activity is expected to remain sluggish through most of the morning, although some additional bids may be seen as the day continues. Open interest added 713 positions (273,796). June contracts lost 601 positions (3,874) and August contracts gained 418 positions (130,562). DTN projected slaughter for Tuesday is 120,000 head.

FEEDER CATTLE:

Open: Mixed. Feeder cattle trade once again turned into a nearby vs deferred market battle with narrow to moderate gains moving into fall contracts, while concerns of limited long-term support seem to have sellers more willing to hold lower positions in late-month contracts. Limited market movement is expected to be seen, although if early gains in live cattle futures are able to hold, then follow-through buying in the feeder cattle market may develop. Cash index for 6/19 is $129.12, up 1.11. Open interest Monday added 545 positions (34,775).

LEAN HOGS:

Open: Steady to $60 cents higher. Light to moderate gains are seen in most nearby and deferred lean hog futures with the focus on late 2020 contracts showing the most support. July futures are still holding narrow price pressure with the focus on traders covering short positions in August and October futures. The strong reduction of pork supplies through May is helping to stimulate limited buying, but may not be enough to rekindle strong buyer support. Cash hog trade is called $1 lower to 50 cents higher. Most bids are steady to 50 cents lower. Open interest added 2,900 positions (221,359). July fell 1,205 positions (24,776) and August added 927 positions (88,650). Cash lean index for 6/19 is $45.06, down 0.55. DTN projected slaughter for Tuesday is 468,000 head. Saturday runs are expected at 306,000 head.

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

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