Feedlot country is very quiet ths morning with showlist distrbution the only thing on the early-week agenda. We expect the new offering will be steady to somewhat larger than last week. The cash hog trade has open on the defensive with bids $1-2 lower (mostly $1-1.50 lower). The corn market is slumping 3-4 cents lower in the early rounds as decent rainfall in late June continues to support growing conditions and ultimate yield potential. The stock market is bothered again this more by the implications of a trade war between the U.S. and China. The Dow is 247 points lower at this time with the Nasdaq in the red by 104.
Live cattle have opened significantly lower, pressured by Friday's lower cash trade, last week's big kill, and the larger than expected May placement total confirmed by the on feed report. Positively, the discounted board may already have some of these bearish factors dialed in. Open interest on Friday increased by 2,413 (327,620). Spot June liquidated by 1,431 (3,275) and August added 417 (144,985). DTN projected slaughter for today is 118,000 head.
FEEDER CATTLE: Following the negative lead of live futures, feeder are also retreating this morning with losses at this point as much as 100-200 points. Open interest on Friday decreased by 201 (45,260). CME cash feeder index for 06/21: 142.57, up .36
Lean contracts are trading 50 to 200 points lower in the early rounds with triple-digit losses focused on July and August. Spot cash behavior will be a key factor to monitor this week. Yet keep in mind that the June 1 H&P report will be released on Thursday, perhaps causing traders on both sides of the aisle to turn more cautious. Open interest on Friday increased by 980 (227,294). Spot July liquidated by 717 (24,585) and August added 1 (77,942). Cash lean index 06/21: 86.17 up 0.38. DTN projected slaughter for today is 430.000 head. Early talk calls for another small Saturday kill this week, though possibly a bit larger than last week (e.g., 10,000-15,000).
John A. Harrington can be reached at email@example.com
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