DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock trade remains contained with a very narrow trading range. This activity remains sluggish as traders focus on the ability to draw additional interest back into the complex following the market shifts seen last week. Corn prices are lower in light trade. Stock market futures are lower, Dow Jones is 255 points lower while Nasdaq is down 46 points.

LIVE CATTLE:

Open: Steady to 20 cents lower. Very limited interest is seen in all cattle trade Monday morning with traders chopping around in a narrow range despite the aggressive recent market support seen last week. The focus on potential technical support as well as the ability to draw fundamental activity back into the market through the first half of the week is adding to some of the market shifts seen over the last couple of days. Cash cattle activity is expected to remain extremely quiet Monday with inventory taking and show list distribution taking up most of the attention through the day. The unusual trade schedule that developed last week with active trade seen through the middle of the week may create some uncertainty about the timing schedules over the complex. This may bring increased interest through the rest of the cattle market. Open interest Friday added 608 positions (368,937). Spot February lost 3,017 positions (25,896) and April contracts gained 72 positions (151,612). DTN projected slaughter for Monday is 117,000 head.

FEEDER CATTLE:

Open: Mixed. The inability to spark additional strong follow through support Monday after prices posted triple-digit gains in nearby contracts at the end of last week is not causing any significant concern across the market. This is bringing a combination of position taking and follow through buying into the first few minutes of trade as prices are stuck between 15 cents lower to 15 cents higher. Sluggish activity is expected to be seen through most of the morning. Cash index for 2/1 is listed at $148.03, up 0.08. Open interest Friday added 1,169 positions (55,950).

LEAN HOGS:

Open: Mixed. Narrow mixed trading ranges are seen through the entire complex with prices hovering within a 20 cent trading range through the first few minutes of trade. The focus on market adjustments following the price rally through the last half of last week is creating some additional market support over the entire complex. February futures are holding above $75 per cwt with the focus on potential longer term support developing across the entire complex. Cash hog trade Monday is expected $1 lower to $1 higher. Most bids are expected to be steady. Open interest Friday added 349 positions (238,497). Spot month February fell 479 positions (14,963) and April added 280 positions (100,486). Cash lean index for 2/1 is $74.10, up 0.23. DTN projected slaughter for Monday is expected to be 465,000 head.

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

(SK)

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