DTN Before The Bell-Livestock

Early Mixed Trade Keeps Volume Light Monday

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

Mixed trade is slowly developing into the livestock complex as holiday-week activity seems to be the main focus early Monday morning. Strong gains late last week in the cattle complex are having a hard time sparking widespread interest Monday, although firm buyer support seems willing to hold in nearby contracts during early trade. Corn prices are lower in light trade. Stock markets are lower, Dow Jones is 165 points lower while Nasdaq is down 33 points.

LIVE CATTLE:

Open: Mixed. Initial trade is mixed to mostly higher in limited activity with traders looking for additional support across the complex. The limit gains in nearby contracts Friday has allowed for expanded trading limits, but at this point there seems very little interest in wide market moves through early-week trade. The entire week may see subdued trade activity with the holiday break limiting market participation. Cash cattle interest is quiet and not expected to actively develop until after the Fourth of July holiday on Wednesday. This may limit overall bids and asking prices from being seen until sometime Thursday. Show list distribution and inventory taking will be the main focus Monday, but traders will closely watch the futures trade direction through the morning. Open interest Friday gained 226 positions (325,351). Spot month June contracts lost 294 positions (3) and August contracts fell 1,423 positions (135,006). DTN projected slaughter for Monday is 118,000 head.

FEEDER CATTLE:

Open: 40 to 90 cents higher. Firm buyer support is slowly but steadily moving into the complex early Monday morning. The limit-higher gains in August contacts has helped to spur on increased buyer activity. Although at this point it appears that there will be very little interest in moving prices to the available expanded trading limits, the overall light trade may keep markets somewhat volatile through the session. Cash index for 6/28 is listed at $142.00 down 0.55. Open interest gained 132 positions (46,718).

LEAN HOGS:

Open: Mixed. Early trade Monday is a continuation of market activity on Friday. The overall lack of support in the complex in deferred contracts following the hogs and pigs report and expectation of further supply issues through the fourth quarter of the year is creating some concerns through the entire market. Light trade volume is expected to be seen through the week with the holiday breaking up the week and splitting the expected market activity through the week as there is not a consistent weekend for traders and market participants to take time off when the holiday falls in the middle of the week. This could limit overall interest through most of the week, but the lighter trade may bring additional volatility and price shifts through the complex. Cash hog trade Friday is steady to $1 lower per cwt. Most bids are $1 lower. Open interest Friday added 2,155 positions (231,537). Spot month July fell 1,975 positions (17,243) and August gained 262 positions (76,460). Cash lean index for 6/28 is $83.69 up 0.37. DTN projected slaughter for Monday is at 455,000 head.

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

(SK)

Rick Kment