DTN Before The Bell-Livestock

Mixed Cattle Trade Limits Volume

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

Mixed trade is seen in cattle futures with light market activity developing Tuesday morning. The early morning market shifts may allow for additional price activity as more volume moves into the complex. Corn prices are higher in light trade. Stock markets are higher, Dow Jones is 68 points higher while Nasdaq is up 9 points.

LIVE CATTLE:

Open: Mixed. Early movements in live cattle trade are seen from 12 cents lower to 15 cents higher with very little sense of direction developing in any contract. The overall lack of support in futures trade through the last week, as well as weaker cash cattle trade, is causing some additional light liquidation. But with the recent pullback in prices, there is also a sense that buyers may be more willing to step into the complex as seasonal support is expected over the next several weeks. This could leave prices in a choppy but narrow range through most of the session. Cash cattle interest is expected to continue to remain sluggish through most of the day with bids and asking prices still not fully defined. It is likely to be the last half of the week before active movement is seen in the complex. Open interest Monday lost 869 positions (300,143). Spot month August contracts lost 1,149 positions (11,886) and October contracts slipped 771 positions (130,936). DTN projected slaughter for Tuesday is 119,000 head.

FEEDER CATTLE:

Open: Steady to 50 cents lower. Follow-through pressure is expected to continue to hold through most of the morning with limited activity seen in all cattle markets. The strong triple-digit pressure seen early in the week continues to set a weaker tone on the market. This could add some additional market uncertainty to the entire complex with feeder cattle futures starting to establish a range between $145 and $150 per cwt. Cash index for 8/10 is listed at $151.12, steady. Open interest Monday lost 1,351 positions (50,503).

LEAN HOGS:

Open: Mixed. Early trade remains choppy in a light-to-moderate trading range with traders focusing on potential market support seen in cash and pork values through the middle of the week. But, so far, very little fundamental support has redeveloped, allowing many traders to remain cautious about the ability to move prices much higher at this point. Continued pressure in cattle trade is likely to limit the overall support in the hog complex, although late-2018 contracts seem to be holding moderate gains early in the session as traders look for additional market direction. Cash hog trade Tuesday is steady to $1.50 lower per cwt. Most bids are $1.00 per cwt lower. Open interest Monday lost 790 positions (233,138). Spot-month August fell 863 positions (7,968) and October eroded 333 positions (115,093). Cash lean index for 8/10 is $58.28 down 1.79. DTN projected slaughter for Tuesday is at 465,000 head. Saturday runs are expected at 142,000 head.

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

(SK)

Rick Kment