DTN Before The Bell-Livestock

Mixed Trade Seen Early Tuesday

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Livestock futures are mixed in a narrow to moderate range as very limited interest is seen early Tuesday. This could allow for a break out market shifts, but outside market moves may be the main focus of most traders. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 6 points higher while Nasdaq is up 21 points.

LIVE CATTLE:

Open: Mixed. Initial trade is mixed in a single-digit market swing as traders seem to be very cautious to step back into the complex at this point. There is some indication that additional market shifts may develop later in the day. At this point, outside market direction will likely play a bigger role than fundamental moves or shifts in beef values or cash cattle trade. This could keep prices hovering in a narrow range through most of the morning. Cash cattle markets remain quiet Tuesday morning with bids and asking prices yet to be well established. Active trade is not expected until the second half of the week with another Friday trade quite possible. There is expected to be some additional interest developing through the day Tuesday, but outside market direction may play a more significant role through the session. Open interest Monday liquidated 1,070 positions (331,052). Spot month June contracts lost 1,062 positions (11,450) and August contracts slipped 2,291 positions (154,877). DTN projected slaughter for Tuesday is 120,000 head.

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FEEDER CATTLE:

Open: 10 to 25 cents lower. Limited activity is seen across the entire feeder cattle complex. This is allowing for traders to adjust to the lower prices seen Monday, but could also spark some short covering activity through most of the morning. The overall tone of the cattle market still remains firm, although an additional strong market tumble Tuesday could quickly start changing the minds of many traders. Cash index for 6/8 is listed at $140.61 up 0.12. Open interest Monday fell 274 positions (44,061).

LEAN HOGS:

Open: Mixed. Light support is trying to step back into the market early Tuesday morning following the triple digit losses seen in the complex Monday. The focus on firm cash and pork values through the first half of the week may continue to help draw some additional support back into the market. But traders seem to be focusing on market stability and maintaining previous gains rather than any significant market rally in the immediate future. Cash hog trade Tuesday is steady to $1.50 higher per cwt. Most bids are $1 higher. Open interest Monday fell 2,513 positions (232,686). Spot month June fell 639 positions (10,895) and July fell 4,815 positions (53,643). Cash lean index for 6/8 is $75.79, up 1.22. DTN projected slaughter for Tuesday is expected to be 450,000 head. Saturday runs are expected to be seen at 23,000 head.

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

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Rick Kment