DTN Before The Bell-Livestock

GENERAL COMMENTS

The cash cattle trade exists only in theory this morning given the complete lack of bids or asking prices on the early week table. Significant trade volume could easily be delayed until Thursday or Friday. Opening hog bids range from $1 lower to .50 higher, but most buyers seem to be using steady money. Corn futures are 1-2 cents higher in the early rounds, supported by Kansas City wheat and dry conditions across the Southern Plains. The stock market has opened significantly lower this mornng with the Dow off 237 points and the Nasdaq down 55.

LIVE CATTLE:

Live contracts have opened lower, at least temporarily ignoring cash premiums and yesterday's surge in carcass value. Spot Feb is now trading nearly $2 under the top of Friday's feedlot trade. Whether such a discount is right or wrong could remain in the bubble until cash traders get serious again later this week. Open interest on Monday increased by 172 (365,799). Spot February liquidated by 3,054 (37,790) and April added 98 (149,840). DTN projected slaughter for today is 118,000 head.

FEEDER CATTLE:

Feeder futures are moderately lower, shadowing the early defensiveness set in the live market. Producers and traders should have a better handle on the actual feeder cattle supply tomorrow once the USDA releases the anuary 1 herd inventory (i.e., scheduled for 2:00 p.m. CST). Open interest on Monday decreased by 791 (53,472). CME cash feeder index for 01/26: 147.50, up .44.

LEAN HOGS: Lean issues are mostly lower in the early rounds with only spot February supported by the premium of the cash index. Open interest on Monday decreased by 1,298 (245,245). Spot February lost 1,796 (19,362) and April declined by 742 (105,316). Cash lean index 01/26: 73.83, up .06. DTN projected slaughter for today is 466,000 head. Saturday's kill should total close to 115,000.

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

(SK)

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