DTN Before The Bell-Livestock
Cattle Complex Futures Sag as Trading Week Begins
The cash cattle trade is typically quiet for a Monday morning as packers begin to check their traps and collect new showlists. We look for the new offering to be steady to somewhat larger than last week. While feedlot managers will probably take a wait-and-see attitude, our guess is that initial asking prices will start out around $120-121 in the South an d $190-192 in the North. The cash hog trade in the country seems to be staring out with bids 0.50-$1 lower than Friday. Corn futures are higher by 3 cents plus at this time, supported by short covering prior to new World Board numbers to be released on Thursday. Equities are generally higher in the early rounds with the Dow up 12 points and the Nasdaq better by 16.
LIVE CATTLE:
Live contracts have started the week under pressure, apparently unimpressed by the decent show of price stability evident in last week's feedlot trade. Yet the board remains trapped in a wide trading range (e.g., 112-118 basis spot August) with an enormous margin of error. In other words, large price swings these days just don't see to have much technical significance. Open interest on Friday decreased by 6,130 (339,700). Spot August liquidated by 6,379 (24,759) and October lost 1,358 (174,915). DTN projected slaughter for today is 115,000 head.
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FEEDER CATTLE:
Feeders are sharply lower through the opening hour, pressured by long liquidation, sagging deferred live cattle values, and firmness in the corm trade. Currently, spot August is trailing the cash index by more than $3.50. Open interest on Friday increased by 913 (60,081). CME cash feeder index for 08/03: 151.99, up 1.12.
LEAN HOGS:
The lean hog trade is narrowly mixed in the early rounds with neither side showing much enthusiasm. Spot August expires a week from today, so we should start to see better convergence by the end of the week. Open interest on Friday increased by 445 (258,628). Spot August liquidated by 1,103 (18,135) and October grew by 595 (115,188).
Cash lean index 08/03: 86.69, off 0.42. DTN projected slaughter for today is 376,000 head.
(SK)
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