DTN Early Word Opening Livestock

 
Cattle: Steady Futures: $1 Higher Live Equiv $141.21 +0.29* 
Hogs: Steady to $1 Lower Futures: Mixed Lean Equiv $ 82.42 +0.29**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue

GENERAL COMMENTS:

Firm support is expected across live cattle and feeder cattle futures early Tuesday morning as the focus on renewing buyer support developed across the complex. A combination of follow-through support and position-taking is likely to develop through the first couple hours of trade. Cash cattle activity is expected to remain undeveloped with late-week trade likely to be the main order of business. The focus on strong gains seen late last week will likely increase asking prices during the next few days.

Firm pressure is likely in the lean hog futures complex. This is helping to draw additional uncertainty back into the market. The focus on April futures, which have once again broken through long-term support levels, will be the main driver of the lean hog complex. Cash hog values are expected to be steady to $2 per cwt lower with overall lack of support through the early part of the week. Processor schedules are expected at 465,000 head Tuesday. Saturday runs are expected at 75,000 head.

	BULL SIDE		BEAR SIDE
1)	Aggressive cash market gains at the end of last week is likely to help spark additional interest in cash cattle futures through the week.	1)	Limited deferred contract support is likely to limit the overall strength of the complex. This could add even more uncertainty to the entire market.
2)	February live cattle futures have moved above $130 per cwt with traders testing resistance levels of $131.75 per cwt set in November. A move above these levels could spark some additional longer-term market gains.	2)	Cash cattle trade is likely to remain delayed once again, which may bring more uncertainty to the complex during the end of the month.
3)	Stable pork cutout values through the last half of the week is helping to bring some additional support to the market. This may add some buyer interest over the next couple of days.	3)	Sharp triple-digit losses in front-month lean hog futures leading into the long weekend has created some additional uncertainty for the entire complex. This may add more weakness to hog trade early Tuesday morning.
4)	Strong premiums still remain in late summer and fall lean hog contracts as traders focus on strong underlying demand support for pork product. This may bring additional buyers back into the market over the next few weeks.	4)	Cash hog values have continued to weaken through the last couple of weeks, with additional pressure expected Tuesday morning. This is likely to limit any additional buyer momentum through the entire market.

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

(BAS)

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