DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are trading under pressure early Monday morning with live cattle and lean hog futures both holding moderate to sharp losses. The underlying weakness is pushing seller pressure in all markets. Corn markets are trading lower in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 133 points lower while Nasdaq is down 34 points.

LIVE CATTLE:

Opening call: 50 cents to $1 lower. Moderate pressure is developing in live cattle trade following the strong market surge higher last week. Pressure is led by softness in June through December contracts which may continue to add to market weakness and pressure add to the discount in the live cattle market. With very little activity expected in the near term expected in cash markets and boxed beef markets likely to remain sluggish in the near future, live cattle activity could remain subdued through much of the morning. Cash cattle markets remain undeveloped this morning with show list distribution and inventory taking the main order of business being doing through the morning. Open interest Friday added 5,254 positions (384,723). Spot April liquidated 3,289 positions (47,889) and June contracts added 5,233 positions (174,826). DTN projected slaughter for Monday is 115,000 head.

FEEDER CATTLE:

Opening call: 50 cents to $1 lower. Moderate to firm pressure is redeveloping in feeder cattle trade in light trade following moderate to firm pressure in live cattle market softness in live cattle markets early in the week. The strong market gains seen over the last couple of weeks which have been now been faced with the announcement with the Brazilian beef issues seem to be bringing additional pressure to beef pressure in all feeder cattle markets. This could bring additional pressure to cattle markets through the day but will bring additional volatility in the market through the rest of the month of. April through October contracts are the most focused upon contracts with deferred contracts posting triple digit losses. Cash lean index for 3/22 is $131.58, up $0.56. Open interest Thursday added 890 position (57,323).

LEAN HOGS:

Opening call: $1 to $1.50 Lower. Strong pressure continues to develop once again through the lean hog futures market as traders move to support levels as the level of trader activity in the complex continues to increase. There is even more uncertainty with April contracts dipping below $66 per cwt as traders look for long term support from cash hog prices through the summer months. Cash bids are steady to $1 lower with bids 50 cents to $1 lower. Open interest Friday fell 428 positions (209,133). Spot month April fell 2,109 positions (25,116) and June added 780 positions (80,896). Cash lean index for 3/22 is $71.29, down $0.12. DTN projected slaughter for Monday is 440,000 head.

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

(SK)

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