DTN Before The Bell Livestock

Cattle Prices Mixed Early Tuesday

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)

GENERAL COMMENTS:

Light to moderate pressure is seen in both live cattle and lean hog futures Tuesday morning. Although price have edged lower, the lack of market movement and narrow price losses is keeping markets generally stable as traders look for additional longer term direction in cash and wholesale meat values. Corn futures are trading higher in mixed trade. Stock markets are higher in limited morning trade. Dow Jones is 68 points higher with NASDAQ up 22 points.

LIVE CATTLE:

Open: Steady to 50 cents lower. Live cattle futures are taking the brunt of price pressure in the cattle complex, although most losses are contained to 20 to 30 cent losses during early trade. There is very little new fundamental or technical market changes seen in the live cattle complex with August live cattle still struggling to hold prices above $100 per cwt. This price level is more psychological then technical, but with prices unable to break through this barrier, there remains limited buyer support willing to move back into the complex at this point. Cash cattle activity remains quiet with bids and asking prices still hard to pin down at this point. Some additional interest is expected to develop as the day continues, but active trade is not expected to be seen until midweek or later. Open interest added 4,626 positions (261,699). August contracts lost 6,599 positions (78,762) and October contracts added 7,100 positions (87,543). DTN projected slaughter for Tuesday is 121,000 head.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

FEEDER CATTLE:

Open: Steady to 30 cents higher. Very limited market moves are seen in feeder cattle trade. Although the firming tone Monday helped to spark renewed short and potentially long-term interest in the market, the inability to push nearby contracts above $137 per cwt could put a short term price ceiling on market buying, allowing traders to establish a new, but narrow trading range. Hot and dry areas in several cattle producing areas and continued hot forecasts may put pressure on the ability to maintain herd health, but at this point is likely to limit long term price gains. Cash index for 7/10 is $135.17, up 0.25. Open interest Monday added 1,730 positions (39,993).

LEAN HOGS:

Open: Steady to 50 cents lower. Light to moderate losses have slowly trickled into lean hog futures trade as traders take positions after strong gains Monday. The firm tone in the market early in the week has pushed August futures above $50 per cwt, which is currently able be sustained despite the limited selling pressure at opening bell. There remains concerns about short- and long-term pork demand growth, but there is increased focus on the ability to increase slaughter rates, which is helping to limit the backlog of market ready hogs over the coming weeks and months. Trade volume is expected to remain sluggish in the next couple of hours, allowing prices to likely hover in the current ranges. Cash hog trade is called 50 cents lower to 50 cents higher. Most bids are steady to firm. Open interest added 1,196 positions (224,491). July fell 1,420 positions (11,219) and August slipped 5,692 positions (63,527). Cash lean index for 7/10 is $45.64, up 0.31. DTN projected slaughter for Tuesday is 474,000 head. Saturday runs are expected at 198,000 head.

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

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Rick Kment