DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock trade remains stuck in a narrow trading range early Tuesday morning. The aggressive support seen early in the week has been undeveloped so far Tuesday as most contracts are mixed in a very narrow range. The overall lack of direction developing within the first few minutes of trade could lead to moderate shifts later in the session as additional volume moves back into the complex. Corn markets are trading lower in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 33 points lower while Nasdaq is down 24 points.

LIVE CATTLE:

Opening call: Mixed. The inability to draw active buyer support into the cattle complex Monday afternoon while the rest of the livestock complex posted triple digit gains is minimizing additional buyer activity Tuesday. This is leaving markets narrowly mixed as the range is seen from 10 cents lower to 20 cents higher. Traders continue to look for additional longer-term seasonal support moving into the beef complex and the direction of boxed beef values over the next couple of weeks. There remains underlying support under prices hovering just under $118 per cwt in April futures, but traders are closely monitoring the market in order to test $119 through the month of March. Cash cattle markets are quiet early Tuesday morning with bids still undeveloped and potentially remaining that way until midweek. A few early asking prices are seen around $128 to $129 per cwt in the South and $204 and higher in the North. Open interest Monday added 6,256 positions (348,339). Spot April liquidated 3,793 positions (81,549) and June contracts added 7,210 positions (132,868). DTN projected slaughter for Tuesday is 114,000 head.

FEEDER CATTLE:

Opening call: Mixed. Extremely narrow trading ranges are seen in feeder cattle futures with prices hovering on either side of unchanged in the initial minutes of trade. With prices seen from 10 cents lower to 12 cents higher early Tuesday morning there is growing uncertainty as to the follow through support after Monday's rally. There could be some additional longer term buyer activity stepping back into the market through morning trade. Cash lean index for 3/10 is $127.09, down $0.13. Open interest Monday added 112 position (49,568).

LEAN HOGS:

Opening call: Mixed. Strong gains seen Monday morning is expected to remain mixed in a narrow range. Nearby gains are seen in April to June contract months with early follow-through support seen from 15 to 30 cents per cwt. The strong discount continues to be seen in the April contracts as traders look for additional longer-term direction in the market. Deferred contracts are slightly lower with position taking the main order of business through the morning. This could allow for choppy price shifts as traders look for additional direction from the cash market through midweek. Cash bids are $1 lower to $1 higher with most bids steady. Open interest Monday added 448 positions (214,843). Spot month April fell 4,407 positions (46,276) and June added 2,701 positions (74,927). Cash lean index for 3/10 is $72.14, down $0.37. DTN projected slaughter for Tuesday is 440,000 head. Saturday runs are expected at 145,000 head.

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

(SK)

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