DTN Before The Bell-Livestock

GENERAL COMMENTS

Strong gains have quickly moved into cattle trade early Monday morning with traders taking into account the gains in cash cattle trade last week and firming buyer support across the complex. Hog markets have continued to see early-week pressure with buyers focusing on additional longer term activity through Monday morning. Corn prices are higher in light trade. Stock markets are lower, Dow Jones is 13 points lower while Nasdaq is down 10 points.

LIVE CATTLE:

Open: 30 to 60 cents higher. Firm buyer activity is slowly but steadily moving into the complex with overall trade interest quickly developing across the market. There is growing support that could help to bring about additional price movement through the morning as traders are closely watching to see if the strong moves in feeder cattle trade will hold. This may bring about additional longer term support as traders bounce back from shifts seen last week. Cash cattle markets remain quiet early Monday morning with inventory taking and show list distribution the main focus of all parties through the day. The moderate trade that developed late last week pushed prices $3 to $5 per cwt higher than the previous week, indicating additional support may be building in the complex. Open interest Friday gained 58 positions (346,081). Spot month April contracts lost 1,024 positions (6,472) and June contracts fell 902 positions (151,370). DTN projected slaughter for Monday is 118,000 head.

FEEDER CATTLE:

Open: $1 to $2 higher. Initial support flooded into feeder cattle trade with increased overall support seen in front-month April futures. It is uncertain at this point in the morning how deep buyer support remains, but the aggressive move higher is helping to bring about additional support through the rest of the complex. Cash index for 4/19 is listed at $136.56 down 0.56. Open interest Friday liquidated 1,386 positions (48,591).

LEAN HOGS:

Open: 60 cents to $1.50 lower. Swift selling activity is developing early Monday morning following the tumble in the market seen late last week. This pressure is pulling back from the aggressive market rally that developed through the first half of April as traders are looking for a more stable platform to build on over the next couple of months. The strong cash market movement over the last week is also creating some pullback as some traders wonder if the market has moved too fast too quickly. This may keep volatility high across all nearby contracts through the early part of the week. Cash hog trade Monday is steady to $1 higher. Bids are evenly scattered through the range. Open interest Friday added 2,919 positions (239,622). Spot month May fell 35 positions (3,511) and June added 697 positions (93,626). Cash lean index for 4/19 is $56.80, up 0.83. 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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