DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm follow-through pressure is seen in the cattle trade. There is growing weakness through the complex as deferred feeder cattle trade is leading the market lower. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 201 points higher while Nasdaq is up 46 points.

LIVE CATTLE:

Open: 30 to 60 cents lower. Firm pressure is once again developing in live cattle futures following a generally weak cattle on feed report seen Friday. This is adding to the market pullback seen over the last couple of weeks and could add even more fuel to the liquidation fire over the end of the month. Cash cattle activity is undeveloped with bids and asking prices not expected for another day or two. Inventory taking and show list distribution will be the main focus in all areas. Open interest Friday added 2,848 positions (374,849). Spot February lost 878 positions (2,668) and April contracts slipped 400 positions (143,233). DTN projected slaughter for Monday is 117,000 head.

FEEDER CATTLE:

Open: Steady to 70 cents lower. The focus on increased placement numbers in the overall cattle on feed report Friday is setting the market for additional pressure. Most softness is developing in nearby contracts with overall lack of direction seen in the entire cattle trade. Cash index for 2/21 is listed at $148.05, up 0.06. Open interest Friday added 109 positions (57,109).

LEAN HOGS:

Open: Mixed. Light activity is seen early Monday morning as traders continue to try to square positions and adjust for additional market shifts through the week. Prices are slightly lower in nearby contracts, while narrow gains are able to develop in deferred contracts. This should keep trade quiet through most of the day. Cash hog trade Monday is expected steady to $1 lower. Most bids are expected to be scattered through the range. Open interest Friday fell 1,170 positions (230,743). Spot month April fell 1,162 in positions (90,456) and June gained 816 positions (48,268). Cash lean index for 2/21 is $70.17, down 0.61. 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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