DTN Before The Bell-Livestock

GENERAL COMMENTS

Strong gains have quickly developed through the entire livestock market with nearby lean hog and feeder cattle futures surging to triple-digit gains in the initial minutes of trade. This could bring additional support to the entire complex Monday. Corn markets are trading lower in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 32 points lower while the Nasdaq is up 2 points.

LIVE CATTLE:

Opening call: Steady to 60 cents per cwt higher. Early live cattle trade continues to draw active buyer support back into the market even though trade is stuck in a moderate trading range. Traders will closely focus on the direction of beef values and outside markets early Monday morning. Cash cattle trade is likely to remain undeveloped early in the week with show list distribution the main order of business Monday. The focus on later week bid development will be watched given the movements in outside markets and futures trade. Open interest Friday added 4,452 positions (342,414). Spot April liquidated 4,490 positions (85,553) and June contracts added 5,679 positions (125,680). DTN projected slaughter for Monday is 115,000 head.

FEEDER CATTLE:

Opening call: Steady to 40 cents higher. Firm follow-through buyer support is quickly moving into the feeder cattle market. This support may help to lead the entire livestock complex through early week trade. There will be more focus on the direction of grain markets early in the week and the ability to sustain previous support. Cash lean index for 3/8 is $127.00, up $0.05. Open interest Friday fell 269 position (49,511).

LEAN HOGS:

Opening call: 50 cents to $1 higher. In lean hog futures, nearby contracts saw triple-digit gains Monday morning. The lack of support seen through the end of last week is redeveloping firm buyer support. The question facing the market is if buyer support will be deep enough to keep this support alive through the entire session. Cash bids are steady to 75 cents lower with most bids steady to 50 cents lower. Open interest Friday lost 274 positions (214,476). Spot month April fell 4,467 positions (50,704) and June added 2,524 positions (72,277). Cash lean index for 3/8 is $72.59, down $0.01. DTN projected slaughter for Monday is 443,000 head.

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

(SK)

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