DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed livestock futures have posted light to moderate moves through early trade. Firm pressure in hog futures is being offset by narrow gains in nearby cattle trade. The lack of direction Monday morning may keep prices hovering in current market levels through most of the morning. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 198 points higher while Nasdaq is up 30 points.

LIVE CATTLE:

Open: Mixed. Light gains in nearby contracts are being offset by lack of consistency and narrow losses in deferred contracts. This may allow for prices to struggle to break away from a narrowly mixed trading range through most of the morning. Traders are focusing closely on outside markets as well as the potential to bring some stability to beef values through the midday report. Cash cattle interest is expected to remain sluggish early Monday following steady to weak trade on Friday compared to the week previous. It is likely that bids and asking prices will remain undeveloped over the next couple of days with show list distribution and inventory taking the main order of business. Open interest Friday liquidated 5,029 positions (339,253). Spot month June contracts lost 7,375 positions (25,010) and August contracts slipped 1,577 positions (164,174). DTN projected slaughter for Monday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 40 cents higher. Firm gains have slowly stepped into the feeder cattle complex. There is increased buyer activity through the market following the pressure last week. But the overall tone of the market remains cautious as concerns that early buying may quickly fade. This could keep volume light and prices hovering within a narrow trading range through most of the morning. Cash index for 5/31 is listed at $136.17 up 1.35. Open interest Friday gained 16 positions (43,049).

LEAN HOGS:

Open: 50 cents to $1 lower. Pressure developed early in the lean hog complex as traders continue to focus on the ability to draw traders back into the market. But pressure in outside markets and uncertainty in pork values is adding some concern to the overall complex with traders looking for additional market shifts through the coming weeks. July futures are leading the market lower with a $1 per cwt loss. This could spark some additional price pressure over the near future. Cash hog trade Monday is steady to $1.50 higher per cwt. Most bids are steady to firm. Open interest Friday fell 1,104 positions (237,380). Spot month June fell 1,805 positions (19,342) and July fell 2,277 positions (70,840). Cash lean index for 5/31 is $70.01, up 0.38. DTN projected slaughter for Monday is expected to be 450,000 head.

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

(SK)

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