DTN Before The Bell-Livestock

Mixed Early Trade Soaking in Previous Cattle Gains

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

Limited trade activity is expected to continue to be seen through the entire livestock market Tuesday morning. Traders are reacting to strong triple-digit shifts that developed early in the session. This may add some additional market shifts, but limited direction is likely. Corn prices are higher in light trade. Stock markets are lower, Dow Jones is 35 points lower while Nasdaq is down 14 points.

LIVE CATTLE:

Open: Mixed. Limited market movement is seen early Tuesday morning following the strong triple-digit rally seen Monday. There is some follow-through buying being met with position-taking. This could leave the entire complex generally sluggish through the entire trading session as no new market developments are expected to be seen over the next couple of days. Cash cattle interest is still undeveloped with asking prices and bids still hard to pin down. It is expected that trade will not be seen until the latter half of the week, and potentially after the Cattle on Feed report on Friday. Open interest Monday gained 1,585 positions (321,254). Spot-month August contracts lost 7,357 positions (73,833) and October contracts added 6,959 positions (118,221). DTN projected slaughter for Tuesday is 119,000 head.

FEEDER CATTLE:

Open: 20 to 50 cents Lower. Buyers seen Monday have stepped away from the market, which is allowing for light-to-moderate weakness to develop through the entire complex. This may not change the recent firmness seen in the cattle complex, but the break away from consistent buyer activity could help to give the market a time to cool down and get some longer-term perspective. Cash index for 7/10 is listed at $145.08 down 1.67. Open interest Monday added 119 positions (47,411).

LEAN HOGS:

Open: Mixed. Light-to-moderate pressure is seen in most lean hog futures trade. Front-month August futures have been able to scratch out a moderate gain of 30 cents per cwt in early trade, but the rest of the complex is 10 cents to $1 per cwt lower in the first few minutes of activity. The focus on pressure rebuilding in deferred contracts focuses on uncertainty about long-term demand for pork product. This will likely keep markets sluggish over the next several trading sessions. Cash hog trade Tuesday is steady to $1.00 lower per cwt. Most bids are 50 cents lower. Open interest Monday fell 1,192 positions (231,448). Spot month July fell 116 positions (6,969) and August slipped 3,319 positions (43,682). Cash lean index for 7/10 is $81.52 down 0.15. DTN projected slaughter for Tuesday is at 455,000 head.

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

(SK)

Rick Kment