DTN Before The Bell-Livestock

GENERAL COMMENTS

Light buyer support is slowly moving back into the livestock complex following mixed trade in cattle and hog markets. This overall lack of support may continue to bring increased direction to the complex. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 327 points higher while Nasdaq is up 77 points.

LIVE CATTLE:

Open: Mixed. Very narrow trading ranges have developed early Monday morning with prices trading mostly higher, but limited to sluggish market swings. The focus on short covering activity through the middle of the month has created additional market shifts across the complex. This could limit additional gains later in the day, although at this point it is going to be hard to position for aggressive liquidation that still needs to take place. This may limit volume in the market during much of the Monday session. Cash cattle markets are inactive following the quiet trade late in the day Friday. There is still some uncertainty as to how many cattle actually traded last week, but all indications show light trade activity that have left packers short bought once again. Show list distribution and inventory taking will be the activity of the day. Open interest Friday lost 4,039 positions (362,536). Spot February lost 2,867 positions (16,601) and April contracts slipped 2,424 positions (147,389). DTN projected slaughter for Monday is 118,000 head.

FEEDER CATTLE:

Open: Mixed. Sharp losses seen late last week has created a combination of narrow short covering activity while prices have continued to record light follow through selling activity. The overall focus in the market is likely to be placed on the moves in outside markets as well as traders trying to bring back a sense of commercial support in all cattle trade. Cash index for 2/8 is listed at $147.57, down 0.45. Open interest Friday fell 315 positions (55,738).

LEAN HOGS:

Open: Mixed. Narrow trade ranges have once again developed across the lean hog complex with most contracts hoovering in a narrow but mixed trading range from 10 cents lower to 12 cents higher. The overall inactivity in the complex continues to focus on market uncertainty in all trade with traders starting to erode the summer premiums over the last couple of days, even though significant price shifts are not likely to develop over the next couple of months. Cash hog trade Monday is expected steady to $2 lower. Most bids are expected to be 50 cents to $1 lower. Open interest Friday added 245 positions (231,753). Spot month February liquidated 596 positions (9,298) and April lost 3,363 positions (95,847). Cash lean index for 2/8 is $75.38, down 0.25. DTN projected slaughter for Monday is expected to be 465,000 head.

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

(SK)

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