DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade is once again developing across livestock trade with early movements in live cattle and feeder cattle markets posting early pressure. Firm gains are attempting to hold across lean hog futures with markets moving in the same direction, even though with less intensity as was seen Monday in pre-holiday trade. Corn markets are trading higher in light trade activity. The stock market is trading mixed in light early trade. Dow Jones is 49 points lower while Nasdaq is up 4 points.

LIVE CATTLE:

Opening call: Steady to 20 cents lower. Light pressure has slowly developed across the live cattle complex, allowing for additional market erosion during early July. Even though pressure was seen Monday, the overall lack of trade volume during the shortened pre-holiday trading session is likely going to be a poor indicator of the overall longer term direction of the market. Additional trade volume is stepping into the market, which may give a better long-term direction for the complex as traders focus on supply issues and potential beef value direction through the rest of the summer. Cash cattle activity is still extremely quiet with bids and offers yet to be fully established. Active trade are likely to be pushed off until later in the week with bids possibly not developing until sometime Thursday. The Fed Cattle Exchange will trade through the morning, likely giving the first indication of cash business. This may spark additional activity later in the day or week. Open interest Monday lost 388 positions (377,788). Spot June lost 8 positions (9) and August contracts fell 3,187 positions (154,992). DTN projected slaughter for Wednesday is 116,000 head.

FEEDER CATTLE:

Opening call: 50 cents to $1 lower. Early trade Wednesday is adding to the already soft market tone seen during early July. Triple digit pressure seen in feeder cattle markets Monday even though overall light trade was seen across most contract months places even more questions in traders' minds about the ability to set support levels through the near future. Most nearby contracts have been contained to light losses during initial trade Wednesday, although the lack of support in live cattle markets may bring about additional pressure through the rest of the morning. Cash lean index for 6/30 is $147.99, down $1.24. Open interest Monday fell 21 position (57,276).

LEAN HOGS:

Opening call: Steady to $1 higher. Light follow-through buyer support has slowly stepped back into the complex following the holiday. Early trade Monday helped to drive additional commercial buyer support back into the lean hog complex during early July, allowing for the potential of follow through support to continue during the next couple of weeks. With July lean hog futures solidifying prices above $90 per cwt, traders continue to look for firm cash market support and the potential of additional strong pork movement through the rest of the summer. Cash bids 50 cents lower to $1 higher with most bids steady to 50 cents higher. Open interest Monday added 7,003 positions (271,260). Spot month July liquidated 1,242 positions (16,623) and August added 1,260 positions (92,609). Cash lean index for 6/30 is $91.71, down $0.01. DTN projected slaughter for Wednesday is 435,000 head. Saturday runs are expected at 190,000 head.

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

(SK)

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