DTN Before The Bell-Livestock

GENERAL COMMENTS

Light, mixed trade is seen through the entire livestock markets Tuesday morning with traders focusing on squaring positions following recent market shifts. Overall activity levels are likely to remain light through most of the morning. There is likely to be some additional market shifts following outside market moves later in the day, but traders will also focus on the potential for increased direction in cash markets. Corn markets are trading lower in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 37 points higher while Nasdaq is up 17 points.

LIVE CATTLE:

Opening call: Mixed. Narrow trading ranges are seen across the complex with prices hovering from 15 cents lower to 12 cents higher. The gains in the live cattle complex have not been nearly as aggressive or impressive as the feeder cattle market, but there continues to be growing market resistance at and above the $119-per-cwt level. Early-session position taking appears to be focused on during the early minutes of trade, but this could limit longer-term market activity through the rest of the session. Cash cattle markets are quiet early Tuesday morning with bids still undeveloped for the week. It is likely that asking prices will be around $130 and higher in the South and $212 to $214 per cwt in the North. Despite trade consistently taking place on Wednesday over the last three weeks, active trade may be delayed later in the week. The upcoming cattle on feed report Friday may have an impact on delaying trade activity. Open interest Monday added 3,383 positions (363,524). Spot April liquidated 5,037 positions (64,044) and June contracts added 6,925 positions (153,301). DTN projected slaughter for Tuesday is 114,000 head.

FEEDER CATTLE:

Opening call: Mixed. Mixed trade is seen early Tuesday as traders have slowly backed away from the strong market support seen over the last couple of trading sessions. Prices are ranging from 15 cents lower to 12 cents lower, although several contracts are stuck within a few pennies of unchanged in either direction. It is possible that some follow through support may develop in the feeder cattle market during the Tuesday session. But feeder cattle contracts have went essentially unchecked since the beginning of the month and have rallied $8 per cwt. This is leaving the market wide open and for a position taking correction within the near future. Cash lean index for 3/17 is $129.70, up $0.43. Open interest Monday added 1,651 position (53,962).

LEAN HOGS:

Opening call: Mixed. Lean hog futures are starting Tuesday morning in the same place they left off Monday afternoon. With very light activity developing and market direction unable to be seen. Prices are mixed in a narrow trading range as many nearby contracts have been contained to single digit moves during initial trade activity. There will be growing focus on outside market activity through the day as well as many traders trying to gauge the direction of pork product values and demand by the morning cutout report. Cash bids are steady to $1 lower with most bids steady to 50 cents lower. Open interest Monday fell 714 positions (218,051). Spot month April fell 2,315 positions (37,649) and June added 1,069 positions (81,314). Cash lean index for 3/17 is $71.61, down $0.13. DTN projected slaughter for Tuesday is 440,000 head. Saturday runs are expected at 135,000 head.

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

(SK)

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