DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm gains are seen in all livestock futures early Monday morning. The focus on additional trade volume could help to sustain the firming market direction seen late last week. So far, trade remains light in cattle and hog markets, and this could limit overall movement through the session. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 45 points higher while Nasdaq is up 4 points.

LIVE CATTLE:

Open: 50 to 80 cents higher. Early support is seen in live cattle futures Monday morning. The focus on increased trade volume is likely to help draw additional buyer activity to the complex and may spark some additional interest through the complex. It is uncertain at this point just how deep buyer activity will become over the session Monday, and if prices will be able to hold through the complex. There is growing support for June futures holding above $110 per cwt, but lack of trade volume may be the biggest factor in market shifts through early week. Cash cattle activity remains quiet early Monday with show list distribution and inventory taking the main focus across all areas. The late-week bounce in prices Friday helped to solidify deals from $5 to $7 per cwt higher than the previous week. The solid futures support as well as packers becoming more aggressive to source needed cattle is helping to draw prices higher. Open interest Friday liquidated 416 positions (332,189). Spot month June contracts lost 1,404 positions (12,512) and August contracts slipped 959 positions (157,212). DTN projected slaughter for Monday is 119,000 head.

FEEDER CATTLE:

Open: 60 to 90 cents higher. Solid gains are seen in the opening minutes of cattle market trade as traders try to take advantage of the recent market support. There is expected to be some additional buyer activity seen through the complex, which may add even more support to the entire complex over the next several days. The firm moves in cash cattle trade last week is also helping to build overall fundamental support in feeder cattle makets. Cash index for 6/7 is listed at $140.49 up 0.84. Open interest Thursday gained 220 positions (44,343).

LEAN HOGS:

Open: 10 to 50 cents higher. Light buyer support is moving into the lean hog complex with traders focusing on the triple-digit gains that held late last week. The focus on renewed buyer support expected to be seen in cash trade is helping to solidify buyer support in all contracts. Trade is likely to remain sluggish through most of the morning, but the ability to draw buyers back to the complex could help to add even more support to the entire complex. Cash hog trade Monday is $1 to $2 higher per cwt. Most bids are $1 higher. Open interest Friday fell 1,474 positions (235,211). Spot month June fell 1,077 positions (11,537) and July fell 3,358 positions (58,460). Cash lean index for 6/7 is $74.57, up 1.07. DTN projected slaughter for Thursday is expected to be 450,000 head. Saturday runs are expected to be seen at 25,000 head.

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

(SK)

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