DTN Before The Bell-Livestock

Meat Futures Open Moderately Lower

(DTN photo by Nick Scalise)
GENERAL COMMENTS

Feedlot country remains quiet this morning as buyers and sellers monitor both futures and wholesale beef action before fully considering bids and asking prices. Cash potental may stay poorly defined until midweek or later. The cash hog market has opened with bids ranging from steady to $1 higher. Most of the early "try." is $0.50-$1 higher. Corn futures are 1-2 cents higher at this time, but traders seem a bit nervous bout outside markets. The stock market as open under pressure, checked in part by rising nterest rates the benchmark U.S. 10-year Treasury yield, which moves inversely to its price, hit 3.058 percent, its highest read since 2011. The Dow is off 175 points with the Nasdaq down 67.

LIVE CATTLE:

Live contracts have open 10-50 lower thanks to residual selling from Monday's bg price drop. Yesterday's growth in open interest makes the early triple-digit drop look even more negative. Open interest on Monday increased by 1,985 (357,996). Spot June liquidated by 1,874 (79,244) and August expanded by 1,814 (146,897). DTN projected slaughter for today is 118,000 head.

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FEEDER CATTLE:

Feeders are also off to a softer start, following the cautious lead of the live market. Open interest on Monday increased by 790 (45,936). CME cash feeder index for 05/11: 136.12, off 1.09.

LEAN HOGS:

Lean hog price action is 20-60 lower thanks to profit taking on the immediate heels of yesterday's rally. June bulls will be carefully watching the pace of cash progress going forward given the board's large premium. Given this morning's update in open interest, it would appear that much of Monday's price jump was fueled by short covering. Open interest on Monday decreased by 975 (244,367). New spot June liquidated by 2,406 (54,048) and July increased by 735 (66,106). Cash lean index 05/11: 64.65, up .59. DTN projected slaughter for today is 460,000 head. At this point, the Saturday kill looks around 80,000.

John A. Harrington can be reached at john.harrington@dtn.com

(SK)

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