DTN Before The Bell-Livestock

Mixed Cattle Trade Keeping Markets Sluggish

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

Mixed trade is seen across livestock trade. This may draw additional increased movement through the end of the session, although traders seem to be showing very little market interest to the cattle trade at this point. Corn prices are higher in light trade. Stock markets are mixed, Dow Jones is 99 points lower while Nasdaq is up 5 points.

LIVE CATTLE:

Open: Mixed. Light buyer support is seen early Tuesday morning with prices holding narrow gains of 7 to 20 cents per cwt. But the lack of consistent buying activity is limiting additional support and keeping prices sluggish through most of the complex. Traders are going to be as glued to developing cash and beef market activity as they are the outside market direction through the next couple of days. Cash cattle activity remains undeveloped with bids and asking prices still unable to be seen. It is likely that it will be the second half of the week once again before trade develops despite the firming cash activity last week. Open interest Friday gained 449 positions (374,036). Spot February lost 3,056 positions (9,389) and April contracts slipped 559 positions (147,381). DTN projected slaughter for Tuesday is 117,000 head.

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FEEDER CATTLE:

Open: Mixed. A combination of early buyer support and follow-through position taking is seen early Tuesday morning. So far trading ranges have been contained to a narrow market swath with prices seen from 10 cents lower to 15 cents higher. It is likely that as more traders move back into the market, the price spreads will widen, although the underlying tone of the market is likely to remain stable through most of the session. Cash index for 2/15 is listed at $148.15, up 0.45. Open interest Friday added 317 positions (57,193).

LEAN HOGS:

Open: Mixed. Light to moderate buyer support is attempting to trickle into the lean hog complex Tuesday morning as traders return from the long weekend break. The move of prices 50 cents to $1 per cwt higher are being cautioned with the overall lack of direction in the market and uncertainty in pushing deferred contracts higher. This could leave markets with a firmer undertone, but the inability to draw aggressive buyer support back to the table due to the recent market pressure and uncertain fundamental direction in the complex. Cash hog trade Tuesday is expected steady to $1 lower. Most bids are expected to be 50 cents to $1 lower. Open interest Friday fell 2,995 positions (233,021). Spot month April fell 1,132 in positions (91,027) and June fell 169 positions (46,639). Cash lean index for 2/15 is $72.89, down 0.60. DTN projected slaughter for Tuesday is expected to be 462,000 head. Saturday runs are expected at 102,000 head.

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

(SK)

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Rick Kment