DTN Before The Bell-Livestock

GENERAL COMMENTS

Unified pressure is seen through the livestock markets Tuesday morning. This continues to drive additional market movement across the entire complex. Cattle markets continue to lead the market lower, although the depth of pressure is uncertain at this point, which could limit he concern through the rest of the session. Corn markets are trading higher in light trade activity. The stock market is trading higher in light early trade. Dow Jones is 1 point higher while Nasdaq is up 1 point.

LIVE CATTLE:

Opening call: Steady to 50 cents lower. Moderate pressure has developed in live cattle trade early Tuesday morning as traders continue to focus on short covering positions following the aggressive triple-digit gains that developed Monday. With August futures locked in limit gains at closing bell Monday, live cattle futures now have expanded trading limits, of $4.50 per cwt, which could create market volatility. But the overall uncertainty of the market remains concerning as traders focus on recent market pressure and recent cash market weakness. Cash cattle markets remain undeveloped in light trade early Tuesday morning with no interest yet seen in bids or asking prices at this time. It is expected that additional activity will develop over the next couple of days, but the volatility in the futures trade could spark some momentum through cash markets with packers and feeders trying to see just how much stability will be seen following the market slide seen over the last couple of weeks. With the holiday week next week and end of Month and Quarter, there is likely to be also some apathy in the market in the desire to access large amounts of cattle through the week. Open interest Monday lost 1,519 positions (390,220). Spot June lost 923 positions (2,836) and August contracts fell 1,969 positions (174,747). DTN projected slaughter for Tuesday is 116,000 head.

FEEDER CATTLE:

Opening call: Steady to 50 cents lower. Feeder cattle markets have moved moderately lower early Tuesday following limit gains of $4.50 per cwt gains which developed in the trade. This continues to drive additional volatility in the market. Traders have created additional narrow trading ranges early Tuesday, but most commercial traders remain on the sidelines as they wait for additional direction to develop from outside markets. This may help to bring more direction to both the feeder cattle and live cattle trade, but also the focus on cash markets which will trade later in the week will bring more clarity to the overall movement of the cattle market shifts. Cash lean index for 6/23 is $145.84, down $1.25. Open interest Monday added 334 position (56,032).

LEAN HOGS:

Opening call: Steady to 50 cents lower. Light pressure is developing early Tuesday morning as traders are focusing on short covering following early week gains that developed across the complex. This helped to bring buyers back into the market through the week, but may limit overall trade activity during the session. Traders are focusing on market movement during the early minutes of trade with prices moving from initial losses, to mixed trade with the focus on trade activity focusing the ability on squaring positions through the end of the month. Cash bids steady to $1 higher with most scattered through the range. Open interest Monday gained 1,969 positions (258,847). Spot month July liquidated 607 positions (21,985) and August fell 1,066 positions (95,118). Cash lean index for 6/23 is $90.62, up $0.45. DTN projected slaughter for Tuesday is 430,000 head. Expected runs for Saturday are currently at 21,000 head.

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

(SK)

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