DTN Before The Bell-Livestock

GENERAL COMMENTS

The cash cattle trade is rypically quiet as the week begins as buyers and sellers focus on the distribution of new showlists. We expect the offering to be somewhat larger than last week. Hog buyers have started work the morning with bids ranging from $1 higher to 0.50 lower. Most packers are trying to own live inventory at steady to 0.50 lower. Corn futures have open 2-3 cents higher, supported by spillover buying in the bean trade, encouraging news linked to better relations between U.S. and China, and dry forecasts affecting the Brazilian corn crop. The stock market is higher at this point with the Dow up 269 points and the Nasdaq positive by 67.

LIVE CATTLE:

Live contracts have opened with a good head of steam. Triple-digit gains are now evident thanks to short covering, oversold charts, cash premiums and talk decreasng the threat of trade war. Open interest on Friday increased by 280 (360,048). Spot June liquidated by 3,250 (61,316) and August jumped by 1,017 (158,842). DTN projected slaughter for today is 118,000 head.

FEEDER CATTLE:

Following the lead of their live counterparts, feeders are also significantly higher in the early going. Higher corn could work to check progress through the session, especally if deferred live issues start to falter. Open interest on Friday increased by 139 (47,026). CME cash feeder index for 05/17: 133.58, off 1.25.

LEAN HOGS:

Hog contracts are trading moderately higher in the opening rounds, benefting to some extent by trade talk progress with China and suspension of higher tariffs placed on U.S. pork. Open interest on Friday decreased by 454 (239,227). Spot June liquidated by 2,432 (40,082) and July increased by 961 (70,491). Cash lean index 05/17: 67.74, up 0.73. DTN projected slaughter for today is 462,000 head.

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

(SK)

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