DTN Before The Bell-Livestock

GENERAL COMMENTS

Narrowly mixed trade is seen in cattle trade with prices unable to break out of a sideways pattern early Tuesday. The strong support in both live cattle and feeder cattle trade Monday helped to spark a combination of position taking and follow through buyer activity. Hog markets are holding light gains with underlying support trying to push prices higher during early March. Corn prices are lower in light trade. Stock markets are higher Dow Jones is 16 points higher while Nasdaq is up 26 points.

LIVE CATTLE:

Open: Steady to 25 cents lower. Sluggish market movement is seen across the complex with traders focusing on the ability to see very little additional direction through most of the morning. There is likely to be some additional price shifts developing across the complex later in the day as traders focus on outside markets as well as increased focus on market fundamentals. Cash cattle markets remain undeveloped with very limited bid activity likely to be seen through the day. At this point, traders seem to be focusing on the potential to stabilize futures trade with increased focus moving to beef values. This could help to spark some additional longer term activity through the last half of the week. Open interest Monday liquidated 2,646 positions (372,763). Spot month April contracts lost 6,269 positions (121,655) and June contracts added 1,593 positions (132,937). DTN projected slaughter for Tuesday is 117,000 head.

FEEDER CATTLE:

Open: Mixed. Early trade is mixed to mostly lower with light pressure slowly developing in nearby contracts. There is growing uncertainty as to just how much additional buyer support may continue to develop over the near future. Nearby contracts are holding losses of 5 to 30 cents per cwt as overall trade volume will likely remain sluggish. The ability to draw light price support in deferred contracts is helping to bring the possibility of more buying moving into the complex later in the trading day. Cash index for 3/2 is listed at $145.44 down 0.59. Open interest Monday fell 363 positions (56,315).

LEAN HOGS:

Open: Steady to 20 cents higher. Initial support slowly trickled back into the lean hog complex. There is the potential that follow-through buying may continue to move back into the market following the $1 per cwt gains seen Monday. Trader support continues to develop as front month April futures have rallied nearly $2 per cwt off of recent lows. This buyer support may help to draw additional traders back to the market if the recent trend of open interest liquidation can be broken. Cash hog trade Tuesday is expected steady to $1 per cwt lower. Most bids are expected steady. Open interest Monday liquidated 2,593 positions (225,266). Spot month April fell 2,674 in positions (75,699) and June gained 1,242 positions (54,996). Cash lean index for 3/2 is $67.69, down 0.40 DTN projected slaughter for Tuesday is expected to be 460,000 head. Saturday runs are expected at 110,000 head.

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

(SK)

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