DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm early-buyer support is starting to redevelop in cattle futures early Monday morning. This is helping to draw commercial buyer support across the live cattle and feeder cattle complex. Traders are looking to build additional long-term support based on the potential for fundamental stability to step back into the complex. Lean hog futures are mixed in light trade with July futures holding gains above 80 cent cwt. Corn markets are trading higher in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 99 points higher while Nasdaq is up 31 points.

LIVE CATTLE:

Opening call: 30 to 80 cents Higher. Narrow gains have trickled into live cattle futures Monday morning allowing buyer support to redevelop. This is allowing for increased buyer interest to step back into the complex. June futures have expanded gains through the first few minutes of trade, moving above $124 per cwt with gains above 50 cents per cwt as commercial trader support is once again moving back into the complex. It is uncertain how much additional support will redevelop through the complex during the morning, and if this buyer activity will be able to build additional long lasting momentum through the end of the month. Open interest Friday increased 265 positions (421,609). Spot June liquidated 4,186 positions (56,704) and August contracts added 3,248 positions (185,782). DTN projected slaughter for Monday is 115,000 head.

FEEDER CATTLE:

Opening call: Steady to 50 cents higher. Narrow to moderate buyer interest is slowly developing in feeder cattle futures early Monday morning with May contracts holding a firm gain of 65 cents per cwt in very light trade as traders focus on rolling out of nearby contracts. But very narrow trading ranges are seen in the rest of the complex with 10 to 20 cent gains seen in nearby contracts as prices are hovering near $150 per cwt with the focus on the stability seen in the complex at the end of last week. The potential of renewed support that could develop through the Memorial Day holiday weekend could draw additional underlying support and bring about increased commercial support over the next couple of weeks. Cash lean index for 5/8 is $143.86, up $1.83. Open interest Friday added 298 position (57,222).

LEAN HOGS:

Opening call: Mixed trade has trickled into the complex early Monday morning as traders are slowly developing into the lean hog market. With July futures able to move above the $80 per cwt threshold at the end of the week last week, the main question now is if there will be enough momentum in the market to maintain these price levels due to the lack of buyer interest. Trade is very light within a narrow range in the first few minutes of trade as limited interest is seen through the entire complex. Open interest Friday added 1,806 positions (222,134). Spot month June lost 2,663 positions (31,405) and July added 1,074 positions (61,560). Cash lean index for 5/18 is $75.55, up $0.63. DTN projected slaughter for Monday is 438,000 head.

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

(SK)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.