DTN Before The Bell-Livestock

Triple-Digit Rally Moves Into Cattle Futures

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

Firm support is seen in all livestock futures as triple digit gains are holding in cattle markets and moderate support is growing in the hog complex. Trade volume is expected to remain sluggish through most of the morning, with very limited outside market direction likely by midday. Corn prices are steady in light trade. Stock markets are higher, Dow Jones is 320 points higher while Nasdaq is up 80 points.

LIVE CATTLE:

Open: $1 to $1.50 higher. Follow-through buyer interest is moving into live cattle trade. Even though the firmer tone was not able to hold at the end of the session Monday, underlying interest is still developing and could continue to push prices higher through most of the morning. There continues to be challenges in long-term demand support, but the focus on regaining buyer activity after the recent losses is pushing prices higher during early trade. Cash cattle is still quiet with very limited interest expected to be seen through the morning. There is additional support likely to develop over the near future, although active trade may hold off until the last half of the week. Open interest Monday slipped 357 positions (347,927). Spot month April contracts lost 1,553 positions (18,304) and June contracts fell 490 positions (157,493). DTN projected slaughter for Tuesday is 119,000 head.

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FEEDER CATTLE:

Open: $1 to $2 higher. Triple-digit gains have quickly developed across the cattle market with feeder cattle buying leading the upward market charge. This could add even more support to the entire complex as traders look for increased buyer activity to move through the complex. Cash index for 4/5 is listed at $135.41 up 0.10. Open interest Monday gained 242 positions (50,000).

LEAN HOGS:

Open: 30 to 90 cents higher. Firm buyer support has quickly moved into the lean hog complex. This is adding to the strong triple digit rally seen Monday and could bring follow through support through the rest of the week. Cash hog trade Tuesday are steady to 50 cents higher. Bids are evenly scattered through this narrow range. Open interest Monday fell 772 positions (241,046). Spot month April fell 1,385 in positions (13,602) and June liquidated 1,887 positions (100,858). Cash lean index for 4/5 is $54.75, down 0.52. DTN projected slaughter for Tuesday is expected to be 450,000 head. Saturday runs are pegged at 92,000 head.

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

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Rick Kment