DTN Before The Bell-Livestock

GENERAL COMMENTS

Packer inquiry in cattle country this morning is light. Both sides are likely to pause for a minute or two to monitor the board. Will it soften further? Stabilize? Regroup and rally? Some asking prices have been adjusted lower (e.g., $128 in part of the South). The Fed Cattle Exchange has a showlist this morning totaling 717 head. We will post internet sales on the cash cattle page later this morning as soon as they become available. The cash hog trade this morning is underway with basically steady bids. The corn trade is fractionally lower in the early rounds tied to yesterday's posting of two-month highs. The stock market is rebounding in early business with Dow up 220 points and the Nasdaq stronger by 33.

LIVE CATTLE:

Live contracts are drifting lower in the early going thanks to follow-through selling and long liquidation. Given cash premiums and uncertainty surround the herd inventory about to be unveiled, action through the session could one again provr chopppy. Open interest on Tuesday decreased by 1,036 (364,485). Spot February liquidated by 2,641 (34,947) and April added 253 (150,522). DTN projected slaughter for today is 118,000 head.

FEEDER CATTLE:

Feeders are moderately lower in the opening hour, keying off initial defensiveness in the live trade. We should have a better handle on the actual feeder cattle supply once the USDA releases the January 1 herd inventory this afternoon (i.e., scheduled for 2:00 p.m. CST). Open interest on Tuesday increased by 460 (54,090). CME cash feeder index for 01/29: 147.66, up 0.16.

LEAN HOGS:

Lean futures are mostly higher in the early rounds of trading with nearby issues gaining on their deferred counterparts. Although country offering remain fully adequate and processing margins decent, packers display impressive discipline by keeping a relative tight lid of Saturday slaughter plans. Open interest on Tuesday decreased by 3,081 (242,156). Spot February liquidated by 2,456 (14,906) and April declined by 2,156 (103,157). Cash lean index 01/29: 73.86, up 0.03. DTN projected slaughter for today is 465,000o head. Saturday's kill should total close to 117,000.

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

(SK)

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