DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are holding moderate to firm gains early Monday morning. Lean hog futures are currently leading the complex higher, although trade has backed away from the initial firm support seen in the complex. The focus on regaining market position and covering short positions following the aggressive losses Friday seems to be grabbing the attention of the light trade seen in the market. Corn markets are trading higher in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 63 points lower while Nasdaq is down 34 points.

LIVE CATTLE:

Opening call: Steady to 40 cents higher. Light trade is expected to be seen through live cattle trade through most of the morning with early trade hovering in a narrow range from 20 to 30 cents per cwt higher. Firm gains in feeder cattle markets have continued to draw buyer support back into the entire complex, but the long-term support may be limited unless additional support can be seen in beef values. Cash cattle activity is silent early Monday morning with bids and offers unavailable with show list distribution and inventory taking the main order of business by all parties. The firm support seen last week may bleed into the tight supplies seen through most of the month. Open interest Friday fell 1,074 positions (340,197). Spot April liquidated 4,318 positions (118,750) and June contracts added 961 positions (103,994). DTN projected slaughter for Monday is 114,000 head.

FEEDER CATTLE:

Opening call: Steady to 50 cents higher. Follow-through support is slowly stepping into the feeder cattle market early Monday. This lack of pressure early in the trading session is causing most traders to look for additional support after the strong rally seen Friday. Feeder cattle futures are currently setting the tone of higher trade and buyer support stepping into the entire cattle market. Cash lean index for 3/2 is $126.75, up $0.31. Open interest Friday fell 364 position (50,264).

LEAN HOGS:

Opening call: Steady to 30 cents higher. Initial trade Monday is expected to remain sluggish with traders focusing on trying to regain some market stability following sharp pressure late last week. Most of the early support in the hog complex is likely to be based on short-covering opportunities. Nearby April contracts are likely to lead the market higher during initial trade, although the concern that soft fundamentals may limit upside market moves. Cash bids are steady to $1 lower with most bids steady to 50 cents lower. Open interest Friday added 3,426 positions (220,329). Spot month April fell 3,328 positions (78,281) and June fell 1,026 positions (57,689). Cash lean index for 3/2 is $73.38, down $0.63. DTN projected slaughter for Monday is 443,000 head, with 116,000 expected Saturday.

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

(SK)

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