DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate to strong buyer support is moving through the entire livestock market early Wednesday morning. This may add some additional buyer activity to the complex with strong gains seen in front month lean hog and live cattle futures. There is growing support surrounding fundamental support, but it is uncertain if this will spark increased volume through futures trade. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 104 points higher while Nasdaq is up 9 points.

LIVE CATTLE:

Open: Mixed. Strong follow-through buyer support is quickly moving into nearby live cattle trade with June futures holding gains over $1 per cwt. The overall support in the market continues to be based on the aggressive support seen Tuesday. This may add even more support to the complex through the upcoming days, although the focus through the market is still based on potential demand support seen over the next couple of months. Cash cattle interest is expected to remain sluggish once again with trade likely to be undeveloped until the second half of the week. Even though the Fed Cattle Exchange Auction will take place Wednesday morning, very little definition is expected from any activity that takes place. Bids are expected to be recirculated in the same range as seen Tuesday, $107 live and $177 dressed. Asking prices remain at $114 to $115 per cwt live and 4,183 and higher dressed. Open interest Tuesday liquidated 1,447 positions (335,781). Spot month June contracts lost 3,243 positions (18,072) and August contracts slipped 874 positions (162,280). DTN projected slaughter for Wednesday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 30 cents higher. Narrow gains are trickling into the feeder cattle futures with traders focusing on the ability to bring increased volume to the market. The strong gains seen in all cattle trade Tuesday is helping to bring some increased overall support to the complex with August feeder cattle trading at $146.55 per cwt through early morning trade. Gains will have to continue to develop across the live cattle complex in order to help keep feeder cattle traders active through the morning. Cash index for 6/1 is listed at $139.23 up 3.06. Open interest Tuesday gained 441 positions (43,068).

LEAN HOGS:

Open: 50 cents to $1 higher. Moderate to firm buyer support is moving into the lean hog complex. The focus on pulling back from early week losses in all lean hog trade through the end of the session Tuesday has helped to bring some additional underlying support to the complex. There is growing support for firm follow-through buyer activity to move into nearby contracts as traders continue to shift the attention to potential fundamental support over the next couple of weeks. Cash hog trade Wednesday is steady to $1.00 higher per cwt. Most bids are $1 higher. Open interest Tuesday added 1,079 positions (238,873). Spot month June fell 2,278 positions (14,927) and July fell 471 positions (70,129). Cash lean index for 6/1 is $71.01, up 1.00. DTN projected slaughter for Wednesday is expected to be 450,000 head. Saturday runs are expected to be seen at 61,000 head.

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

(SK)

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