DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are mixed Monday morning with the moderate pressure developing in cattle futures being offset by mixed to light support in lean hog trade. The market is expected to remain choppy through most of the morning with traders looking for a combination of technical and fundamental direction through the early part of the week. Corn markets are trading lower in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 88 points higher while Nasdaq is up 23 points.

LIVE CATTLE:

Opening call: Steady to 50 cents lower. Pressure is developing in live cattle futures early Monday morning following the triple digit losses that were seen through the end of the week last week. There may be some attempts to bring some stability back into the complex, but for now, the overall tone of the market remains steady to weak. There is expected to draw additional interest into the market through the next several hours with the focus being placed in beef values and outside market shifts. Cash markets remain undeveloped and quiet early Monday morning with show list distribution and inventory taking the main order of business through the day. Packers are expected to enter the week short bought with the overall lack of movement seen last week likely to spark the desire to increase trade during the week. Open interest Friday fell 3,169 positions (331,785). Spot February liquidated 1,721 positions (13,799) and April contracts fell 3,058 positions (139,812). DTN projected slaughter for Monday is 114,000 head.

FEEDER CATTLE:

Opening call: Steady to 50 cents lower. Moderate pressure is slowly developing in feeder cattle futures as traders focus on the lack of support seen through the end of the week. Generally traders focus on the ability to draw traders back into the live cattle market, but with lackluster interest now seen in cash markets and outside markets expected to remain generally stable early Monday, the tone of the feeder cattle complex is expected to remain steady to weak. Cash lean index for 2/9 is $121.11, up $0.83. Open interest Friday added 798 position (49,779).

LEAN HOGS:

Opening call: Mixed. Light to moderate trade is seen early Monday morning with price ranges confined to a very narrow trading range on either side of unchanged. The recent support in lean hog futures is creating some uncertainty as to the direction of the long term market moves possible over the next several weeks. Prices are expected to remain generally steady through early Monday morning, which may draw trade back into the market as the week continues. Cash bids are 50 cents lower to $1 higher with most bids steady to $1 higher. Open interest Friday added 481 positions (237,609). Spot month February added 438 positions (14,557) and April lost 292 positions (104,809). Cash lean index for 2/8 is $72.80, up $0.61. DTN projected slaughter for Monday is 435,000 head.

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

(SK)

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