DTN Before The Bell Livestock

Gains Hold in Early Trade

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

GENERAL COMMENTS:

Active price gains are seen in all contracts. This could bring about increased end-of-week buying in cattle and hog futures. Corn futures are trading lower in mixed trade. Stock markets are higher in limited morning trade. Dow Jones is 228 points higher with NASDAQ up 68 points.

LIVE CATTLE:

Open: 50 cents to $1 higher. Strong moves are seen in live cattle trade following the surge higher in nearby futures. Uniform buying is seen in most contracts as traders look for uniform support in all livestock markets Thursday. Cash cattle markets remain generally quiet although the expectation that cash trade will be steady to higher from early-week activity as more focus on the gains in futures trade help to firm feed yard managers asking prices. Open interest added 3,143 positions (264,847). August contracts lost 8,546 positions (63,630) and October contracts added 7,539 positions (102,182). DTN projected slaughter for Wednesday is 120,000 head.

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FEEDER CATTLE:

Open: Steady to $1 higher. Follow-through gains have quickly moved into feeder cattle trade after the strong Tuesday moves. This could add increased underlying support to the complex as traders focus on potential feeder cattle sales and higher expectations of long term live cattle trade over the next couple of months. Cash index for 7/13 is $135.62, up 0.43. Open interest Tuesday added 960 positions (40,968).

LEAN HOGS:

Open: $1 to $2 higher. Strong underlying support moved into lean hog futures trade Thursday morning. The combination of higher cattle trade over the last two days as well as encouraging export sales results in the morning report sparked active support in all nearby contracts. August futures have led the market higher and have not posted gains near $2 per cwt with traders looking for further fundamental support later in the week. Cash hog trade is called 50 cents lower to 50 cents higher. Most bids are steady to 30 cents higher. Open interest added 1,181 positions (225,491). July fell 375 positions (9,472) and August slipped 3,669 positions (53,622). Cash lean index for 7/14 is $46.08, up 0.42. DTN projected slaughter for Thursday is 470,000 head. Saturday runs are expected at 193,000 head.

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

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Rick Kment