DTN Before The Bell-Livestock

GENERAL COMMENTS

Narrow price shifts trickle into cattle trade. There is growing support seen in the cattle complex, although activity levels in all markets are expected to remain sluggish. Corn prices are higher in light trade. Stock markets are lower, Dow Jones is 76 points lower while Nasdaq is down 23 points.

LIVE CATTLE:

Open: Mixed. Narrow trading ranges are seen early Wednesday morning with limited activity likely to develop through most of the morning. There is increased focus on the narrow trading ranges seen through the week in all cattle markets hovering in a very narrow range. There is likely to be some additional direction seen through the end of the week focusing on the moves in cash cattle trade and outside market shifts. Cash cattle interest remains sluggish with very limited activity seen through the first couple of days this week. There is the potential that activity will be delayed until late in the week. Although bids and asking prices are likely to be more evident over the next several hours. Open interest Tuesday fell 561 positions (359,295). Spot month June contracts lost 2,604 positions (54,030) and August contracts gained 619 positions (162,527). DTN projected slaughter for Wednesday is 118,000 head.

FEEDER CATTLE:

Open: 10 to 50 cents higher. Light activity over the last couple of days is allowing for sluggish buyer support to move back into the market. This may add some additional support back to the complex which may spark some underlying buyer activity to be seen over the next week. Traders are also starting to focus on squaring positions ahead of the long holiday weekend. Cash index for 5/9 is listed at $137.93 down 0.07. Open interest Tuesday added 157 unchanged (47,538).

LEAN HOGS:

Open: Steady to 70 cents higher. Firm buyer support is moving into nearby contracts with traders focusing on the ability to retract previous market losses. Nearby contracts are holding gains of 40 to 70 cents per cwt in the initial minutes of trade while deferred contracts remain untraded at this point. The focus on cash market activity will likely help to draw more interest later in the day, and could add some stability to the recent market pressure. Cash hog trade Wednesday is steady to $1 per cwt higher. Most bids are steady to 75 cents higher. Open interest Tuesday added 3,130 positions (241,924). Spot month June fell 1,142 positions (36,848) and June fell 2,017 positions (73,311). Cash lean index for 5/9 is $63.73, up 0.18. DTN projected slaughter for Wednesday is expected to be 460,000 head. Saturday runs are estimated at 30,000 head.

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

(SK)

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