DTN Before The Bell-Livestock

Mixed Cattle Trade Slows Market Interest

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

Mixed trade has once again developed across the complex. This may bring increased overall trade volume to the market later in the day. There is growing buyer support in nearby cattle trade, but the support remains had to develop in deferred contracts. Corn prices are higher in light trade. Stock markets are lower, Dow Jones is 146 points lower while Nasdaq is down 29 points.

LIVE CATTLE:

Open: Mixed. Light to moderate buyer support has stepped back into nearby contracts. The pressure in nearby feeder cattle trade has softened any sense of buyer support, which developed Monday. Increased trade volume may move back into the market, although the narrowly mixed trading ranges which appear to be developing as more trade moves into the market could limit longer term market activity. Cash cattle markets are quiet with no bids or asking prices developing at this point. There may be some additional trade volume seen through the complex later in the week, although packers are expected to be relatively short bought for the week. Open interest Monday gained 3,036 positions (365,404). Spot February lost 1,421 positions (15,180) and April contracts added 1,362 positions (148,654). DTN projected slaughter for Tuesday is 118,000 head.

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FEEDER CATTLE:

Open: Mixed. Firm follow-through buyer support has quickly moved into the complex at opening bell Tuesday morning. But the support seems to have been slowed significantly as nearby contracts try to adjust from the recent market support and trade has slowed. Prices are stuck within a narrow trading range, which could bring about increased market activity during the next couple of days. Cash index for 2/9 is listed at $147.63, up 0.06. Open interest Monday added 503 positions (55,742).

LEAN HOGS:

Open: Mixed. Narrow trading ranges have slowly developed early Tuesday morning. But the strong gains seen through the Monday session seem to be focusing on market uncertainty through the rest of the complex and could bring about increased market activity later in the day. There is the expectation that increased pressure moving into nearby contracts could counter the most recent gains, but at this point it is too early in the session to read too much into this initial market shift. Cash hog trade Tuesday is expected steady to $2 lower. Most bids are expected to be $1 lower. Open interest Monday added 1,086 positions (233,249). Spot month February liquidated 517 positions (8,781) and April lost 1,690 positions (95,066). Cash lean index for 2/9 is $74.72, down 0.66. DTN projected slaughter for Tuesday is expected to be 465,000 head. Saturday schedules are expected to hit 75,000 head.

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

(SK)

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Rick Kment