DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock traders remain focused on light trade in narrow to moderate ranges with supportive moves seen in hog trade while the cattle market is eroding following Friday's USDA Cattle on Feed report. The overall lack of direction in the complex in live cattle market may allow for a break out of additional market shifts later in the session. Corn markets are trading higher in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 108 points higher while Nasdaq is up 33 points.

LIVE CATTLE:

Opening call: Mixed. Early live cattle trade has remained mixed to mostly lower in sluggish early morning trade. The overall lack of support in the complex continues to focus on the overall lack of interest in the feeder cattle market and sharp cash cattle pressure seen last week. Uncertainty as to just how much movement will develop through the first half of the week is keeping volume out of the market and most commercial traders on the sidelines. Cash cattle activity is expected to remain quiet through the first couple days of trade with very little market interest developing Monday. Bids and asking prices will not likely be seen over the next couple of days with the focus on showlist distribution and inventory taking. Lighter overall showlist activity is expected over the week with the holiday week next week disrupting procurement schedules. This may limit overall trade activity through the week, but also create a desire by most traders to get business done earlier then later. Open interest Friday lost 1,678 positions (391,744). Spot June lost 686 positions (3,759) and August contracts fell 1,666 positions (176,716). DTN projected slaughter for Monday is 116,000 head.

FEEDER CATTLE:

Opening call: Steady to 50 cents lower. Light pressure has trickled into nearby contracts early Monday morning following further pressure on June 1 Cattle on feed report. Increased overall placement levels continue to put an overall weaker tone through the market which continues to limit moderate trade activity through the complex. Front-month August futures are 30 cents lower, while deferred contracts have posted more aggressive trade losses as more volume has stepped into the complex. Cash lean index for 6/22 is $147.09, down $0.09. Open interest Friday added 419 position (55,698).

LEAN HOGS:

Opening call: Steady to $1 higher. Firm buyer support is expected to redevelop through lean hog futures trade with buyers stepping back into the lean hog futures market. This may bring additional support back to the complex based on strong fundamental support that still exists through the entire market. July futures are leading the market higher with a $1.20 per cwt rally, bringing additional long-term support potential back to summer contracts, although the August futures remain under the $80 per cwt price level at this point. Cash bids steady to $1 higher with most scattered through the range. Open interest Friday gained 2,237 positions (256,878). Spot month July liquidated 989 positions (22,592) and August added 367 positions (96,185). Cash lean index for 6/22 is $90.17, up $0.87. DTN projected slaughter for Monday is 430,000 head.

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

(SK)

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