DTN Before The Bell Livestock

GENERAL COMMENTS:

Limited activity is likely to be seen most of the day Monday as traders not only adjust positions following last week's price pressure, but also end-of-month and -quarter positioning is likely to take priority during the next two sessions. Corn futures are trading higher in light trade. Stock markets are higher in limited morning trade. Dow Jones is 310 points higher with NASDAQ up 18 points.

LIVE CATTLE:

Open: Mixed. Limited trade direction is seen early Monday morning as traders focusing on additional but limited losses in August through December contracts. The focus on burdensome supplies and the uncertainty in several states how further reopening will take place given the surge in covid cases over the last week is causing limited interest across the live cattle complex. Cash cattle interest is expected to remain sluggish most of the morning with inventory taking and show list distribution developing following lower cash prices last week. There continues to be some uncertainty as to how much activity will be seen through the week given the holiday over the weekend. This will likely push active cash trade to midweek, with some interest seen scattered through the rest of the week. Open interest added 262 positions (274,908). June contracts lost 307 positions (1,813) and August contracts fell 547 positions (129,752). DTN projected slaughter for Friday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 65 cents lower. Follow through pressure continues to be seen in feeder cattle trade. Even though grain markets remain under pressure during early summer months, the concern surrounding the ability to rebuild beef demand through the end of the year is still creating caution by many feeder cattle traders. This continues to hold spot August futures near $132 per cwt with underlying pressure focused on the lack of support in live cattle futures. Cash index for 6/25 is $130.24 up 0.63. Open interest Friday added 130 positions (36,029).

LEAN HOGS:

Open: Mixed. The tone of the lean hog complex still remains extremely weak with very limited fundamental or technical support expected to develop across the complex through the end of the month. But given the aggressive triple-digit losses Friday, short covering is seen in nearby trade. Not only are traders preparing for end-of-month activity, but it is also the end of the 2nd quarter, leaving some commercial and noncommercial traders expected to square positions ahead of quarterly returns. Limited trade volume is seen through the morning and likely to hold through most of the upcoming holiday week. Cash hog trade is called $1 lower to 50 cents higher. Most bids are steady to firm. Open interest fell 268 positions (219,960). July fell 772 positions (21,366) and August eroded by 1,988 positions (87,183). Cash lean index for 6/25 is $45.23, up 0.54. DTN projected slaughter for Monday is 468,000 head.

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

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