DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade is seen across all livestock trade as narrow trading ranges are seen early Monday morning in reaction to sharp limit losses across the cattle market late last week. The overall lack of support in the complex Friday may instill some additional buyer activity to move back into the complex, and this could help to bring additional support through the rest of the week. Corn markets are trading lower in light trade activity. The stock market is trading lower in light early trade. Dow Jones is 30 points lower while Nasdaq is down 5 points.

LIVE CATTLE:

Opening call: Mixed. Despite limit losses at the end of last week and expanded limits available Monday, most live cattle markets are trading in a narrow range early Monday. This lack of movement is allowing for increased movement for potential buyers to step back into the market and cover positions following the pullback late last week. There will be growing uncertainty surrounding beef values and the direction of cash market moves as the week continues. Cash cattle markets are expected to be limited to show list distribution and inventory taking activity early Monday. The focus on the sharp gains over the last couple of weeks seem to have brought about some uncertainty through the complex which may lend to additional weakness through next couple of weeks. Open interest Friday added 818 positions (422,665). Spot June liquidated 10,696 positions (139,644) and August contracts added 6,233 positions (121,154). DTN projected slaughter for Monday is 114,000 head.

FEEDER CATTLE:

Opening call: Mixed. Following a limit lower move which developed Friday as traders quickly reacted to the skyrocketing price levels seen over the last couple of weeks have allowed for feeder cattle markets to have expanded limits Monday. This is creating additional uncertainty through the market and is bringing some buyer activity back into the market during the early minutes of trade. May feeder cattle futures are holding triple digit gains as well as strong support redeveloping in deferred contracts. Fall contracts are holding narrow losses at this point, although there still seems to be some uncertainty surrounding the direction of the market through the next several days. Cash lean index for 4/25 is $139.44, up 0.13. Open interest Friday fell 146 position (58,804).

LEAN HOGS:

Opening call: Mixed. Narrow single digit price moves are expected to characterize early trade Monday across lean hog futures markets as traders slowly assess the overall lean hog complex. The aggressive but supportive market move over the last three weeks through the complex which aha accounted for a $6 per cwt rally across the market continues to draw interest to the entire complex, but the volatility seen in cattle markets is also creating some concern that pressure may start to develop during the next several trading sessions. It appears that buyer support may be underlying the initial market uncertainty Monday morning, which could lead to solid support later in the day. Cash bids are steady to $1 higher with most bids 50 cents to $1 higher. Open interest Friday lost 2,407 positions (215,273). Spot month May lost 80 positions (1,764) and June fell 6,083 positions (64,228). Cash lean index for 4/25 is $59.93, down $0.23. DTN projected slaughter for Monday is 434,000 head.

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

(SK)

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