DTN Before The Bell-Livestock

Firm Cattle Gains Offset By Hog Losses

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Sharp losses have quickly redeveloped in lean hog trade Tuesday morning. This could spark additional liquidation through the entire complex. Light ot moderate gains are seen in cattle futures as spot month live cattle trade is leading the complex higher. Corn prices are higher in light trade. Stock markets are mixed, Dow Jones is 21 points lower while Nasdaq is up 22 points.

LIVE CATTLE:

Open: Mixed. Trade Tuesday morning seems to be a separation between nearby and deferred futures markets. Light to moderate support is quickly moving into the nearby trade with June contracts leading the complex higher with a 70 cent gain. The rest of nearby contracts are holding gains in a tight range from 20 to 30 cents per cwt. Deferred futures are slightly lower, falling 5 to 10 cents per cwt in early trade. But the overall lack of consistent support could keep markets shifting back and forth through most of the day. Cash cattle activity remains dead in the water early Tuesday morning with very limited interest likely to develop through the day. The focus on inventory taking and show list distribution seemed to be the extent of any cash market interest Monday. It is uncertain if bids or asking prices will be developed at this point, although both sides seem comfortable pushing cash trade toward the end of the week. Open interest Monday liquidated 1,656 positions (337,262). Spot month June contracts lost 3,285 positions (21,315) and August contracts slipped 1,013 positions (163,156). DTN projected slaughter for Tuesday is 118,000 head.

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FEEDER CATTLE:

Open: Mixed. Early trade in the feeder cattle complex has been lackluster with prices shifting in a narrowly mixed market direction as the focus on buying in live cattle futures is helping to stabilize the market. There is growing support in nearby feeder cattle futures, but this could keep buyer support very limited through the session. Cash index for 6/1 is listed at $139.23 up 3.06. Open interest Monday fell 423 positions (42,635).

LEAN HOGS:

Open: $1 to $2.40 lower. Sharp losses have redeveloped across lean hog trade early Tuesday morning with triple-digit pressure seen in all nearby contracts. July futures are leading the market lower with $2.35 per cwt losses seen across the market with increased pressure likely to hold through the morning. Nearby contracts are still nearly $1 per cwt above short term support levels set through the last half of May, but the continued pressure and lack of overall long-term pork demand may continue to add to selling activity through the next few days. Cash hog trade Tuesday is steady to $1.00 higher per cwt. Most bids are $1 higher. Open interest Monday added 551 positions (237,931). Spot month June fell 2,005 positions (17,305) and July fell 215 positions (70,630). Cash lean index for 6/1 is $71.01, up 1.00. DTN projected slaughter for Tuesday is 450,000 head.

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

(SK)

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Rick Kment