DTN Before The Bell-Livestock

GENERAL COMMENTS

Early support is trickling into the live cattle complex with buyers focusing on the ability to add increased overall support to late week gains last week. Cash cattle activity is likely to remain sluggish through the next couple of days, but a bounce higher last week from previous week's levels is likely to help to draw additional short- and long-term support back to the complex. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 190 points higher while Nasdaq is up 40 points.

LIVE CATTLE:

Open: 40 cents to $1.20 Higher. Active buyer support is moving into the live cattle complex with traders looking for additional support in nearby futures trade. The focus of buyer interest through the early part of the week is likely to help to draw attention to potential fundamental and technical support over the next couple of weeks. Nearby futures contracts are leading the complex higher with additional activity developing across the market. Cash cattle markets are expected to remain sluggish through the first couple days of the week. The firm trade activity seen Friday will instill additional support into cattle feeders although the limited trade volume which developed should keep packers short bought yet once again. Prices are looking for increased overall support in the market as the week begins with potential additional market support developing through the last half of the month. Show list distribution and inventory taking is likely to be the main focus across the complex. Open interest Friday fell 111 positions (345,755). Spot month April contracts lost 1,178 positions (13,233) and June contracts fell 272 positions (154,232). DTN projected slaughter for Monday is 118,000 head.

FEEDER CATTLE:

Open: $1 to $1.25 Higher. Firm follow through buyer activity is moving into the feeder cattle complex following the recent market gains that developed late last week. Even though there remains concerns about the ability to move fundamental price levels higher over the next several days and weeks, additional buyer support is quickly moving into the market. Some additional technical support is being established, which is helping to spark additional longer term interest through all contract months. Cash index for 4/12 is listed at $136.42 up 0.66. Open interest Friday fell 30 positions (50,973).

LEAN HOGS:

Open: 20 to 60 cents Lower. Limited seller activity is slowly trickling into the market Monday morning. This may add some uncertainty to the overall complex as traders are looking for early market adjustments following thee light to moderate gains at the end of last week. Nearby futures are holding consistent pressure of 50 to 55 cent losses, although trade volume remains light and very little additional movement is seen through the complex. There is growing uncertainty as to just how much additional buyer activity will be seen over the near future, or if prices will gain additional stability through the next couple hours. Cash hog trade Monday is steady to $1 higher. Most bids are expected 50 cents to $1 higher. Open interest Friday added 1,997 positions (246,062). Spot month April fell 365 in positions (11,364) and June liquidated 868 positions (96,106). Cash lean index for 4/12 is $53.23, up 0.26. DTN projected slaughter for Monday is expected to be 468,000 head.

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

(SK)

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