DTN Before The Bell-Livestock

GENERAL COMMENTS

Strong pressure has quickly developed across cattle trade, which is limiting support in all livestock trade. This move lower could quickly add even more weakness to the entire complex and spark increased market weakness through the session. Corn prices are lower in light trade. Stock markets are higher, Dow Jones is 180 points higher while Nasdaq is up 56 points.

LIVE CATTLE:

Open: $1 to $1.50 lower. Firm losses are seen in live cattle futures as traders have quickly tried to adjust to the sharp pressure that developed in feeder cattle trade. This may add some additional uncertainty to the entire complex as traders look for the potential to bring some increased support back to the table over the near future. But most recent pressure has pulled prices below $106 per cwt in June futures which may bring follow through pressure later in the day. Cash cattle interest is expected to remain sluggish the early part of the week. There is growing focus on the recent market support in live cattle trade which has posted gains in the last couple of weeks. But the inability for strong follow-through support to develop in all areas is limiting the overall support. Show list distribution and inventory taking is expected to be the main order of business, limiting bids and asking prices from developing through most of the day. Open interest Friday added 2,895 positions (356,707). Spot month June contracts lost 2,313 positions (128,630) and August contracts gained 3,701 positions (108,097). DTN projected slaughter for Monday is 117,000 head.

FEEDER CATTLE:

Open: $1 to $2 lower. Feeder cattle futures are expected to focus on the additional pressure developing in all cattle markets. There is also growing uncertainty as the most recent pullback in prices could help to spark some follow through pressure through the week. May futures are holding $1.50 per cwt losses with other summer and fall contracts holding losses nearing $2 per cwt through early trade. Cash index for 5/3 is listed at $137.90 down 0.21. Open interest Friday fell 307 positions (44,498).

LEAN HOGS:

Open: Steady to 40 cents lower. Limited trade activity is seen early Monday morning following the mixed but narrow trading ranges seen over the last couple of days. The focus seems to be quickly moving toward the strong pressure seen in cattle trade. This may limit additional buyer interest through the complex, as traders look for additional buyer interest and trade activity to develop later in the day Monday. Cash hog trade early Monday are seen steady to $1 per cwt higher. Most bids are steady. Open interest Friday added 1,122 positions (254,790). Spot month May fell 336 positions (2,348) and June fell 1,600 positions (91,095). Cash lean index for 5/3 is $63.13, up 0.20. DTN projected slaughter for Monday is expected to be 465,000 head.

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

(SK)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.