DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are trading in a narrowly mixed range Tuesday morning with the focus on potential moves in both cash and meat values through midweek. The overall lack of direction and price shifts in the market may keep the market calm for most of the morning, but may allow for a breakout market shift later in the day. Corn markets are trading higher in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 38 points lower while Nasdaq is down 15 points.

LIVE CATTLE:

Opening call: Mixed. Initial trade is steady to 15 cents per cwt lower Tuesday morning, but the lack of follow-through selling pressure could create some moderate buyer support to redevelop in many areas of the complex. Traders continue to focus on the potential to spark some additional boxed beef market support, which could bring additional commercial support back into the complex. Cash cattle remain quiet Tuesday morning with bids still undeveloped. Asking prices are not reported at this point, but expected to start out around $128 in the South and $202 and higher in the North. Trade will likely be delayed until the second half of the week, and potentially Thursday or Friday despite the early trade seen last week. Open interest Monday gained 1,407 positions (340,831). Spot April liquidated 3,319 positions (114,940) and June contracts added 2,252 positions (106,116). DTN projected slaughter for Tuesday is 114,000 head.

FEEDER CATTLE:

Opening call: Steady to 20 cents lower. Lack of direction is temporarily seen in feeder cattle markets following the inability to hold firm market pressure at the end of the session Monday. This is keeping nearby contracts steady to 15 cents per cwt lower during early trade. The lack of follow through pressure could quickly allow for buyer interest to develop across most contracts. Although at this point trade volume is expected to remain light, and could minimize price shifts during the Tuesday session. Cash lean index for 3/3 is $126.86, up $0.11. Open interest Monday added 241 position (50,481).

LEAN HOGS:

Opening call: Steady to 50 cents higher. Light follow-through buyer support is slowly stepping into lean hog futures trade with nearby contracts holding consistent gains from 40 to 45 cents per cwt in the early minutes of trade. The potential to bring additional early-month support into the pork complex which may help to stabilize cash values may keep all spring and summer contracts trading in a tight range during most of the morning. Lack of support continues to be seen through most late 2017 and early 2018 contracts, although all contracts are holding higher prices early Tuesday. Cash bids are steady to $1 lower with most bids steady. Open interest Monday fell 1,712 positions (219,114). Spot month April fell 4,273 positions (74,008) and June added 1,868 positions (60,057). Cash lean index for 3/3 is $72.92, down $0.46. DTN projected slaughter for Tuesday is 443,000 head, with 120,000 expected Saturday.

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

(SK)

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