DTN Before The Bell-Livestock

GENERAL COMMENTS

Feedlot country remains very quiet this morning with bids few and far between (a few preliminaries have been noted in Nebraska at $208/$127). Some showlists have been priced around $134-$135 in the South and $212-plus in the North. Significant trade volume may not develop until Friday. The cash hog trade has opened with bids ranging from steady to $1 higher. Most buyers appear to be working near the top of that range. The corn market is trading 2-3 cents lower in the early going, checked by long liquidation and the general lack of constructive news. The stock market is higher in early business with the Dow up 5 points and the Nasdaq better by 16.

LIVE CATTLE:

Bulls are rocking and rolling so far this morning with triple-digit gains evident in the first three contracts. It would appear that the board is beginning to seriously question the appropriateness of long-held discounts. Note that spot June has blasted through resistance at 125, tripping new buying interest along the way. Open interest on Wednesday increased by 5,046 (426,575). Spot June liquidated by 1,429 (34,962) and August jumped 3,510 (201,059). DTN projected slaughter for today is 116,000 head.

FEEDER CATTLE:

Feeders are also on fire in the early going with gains of 180 to 240 as of this writing. The market is being stoked by follow-through buying interest and rising targets in deferred live issues. Open interest on Wednesday decreased by 265 (54,699). CME cash feeder index for 05/30: $145.53, off $0.08.

LEAN HOGS:

For the most part, lean issues are moderately higher this morning, supported by improving fundamentals, technical buying and spillover support for the cattle complex. July and August have once again set new contract highs. Open interest on Wednesday increased by 5,856 (244,863). Spot June lost 1,562 (23,219) and July grew by 1,655 (66,874). Cash lean index 05/30: $76.53, up $0.08. DTN projected slaughter for today is 440,000 head. The Saturday kill should total close to 220,000.

John A. Harrington can be reached at john.harrington@dtn.com

(SK)

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