DTN Before The Bell-Livestock

GENERAL COMMENTS

Firm pressure in lean hog and feeder cattle futures Monday morning is setting a weaker tone through the entire complex. Limited activity is seen in all markets, although the focus on firming corn prices and uncertainty in outside markets is putting pressure on initial trade activity. Corn markets are higher in light early trade. Stock markets are lower. Dow Jones is 100 points lower with Nasdaq down 69 points.

LIVE CATTLE:

Open: Mixed. Initial trade is starting to weaken, although front-month February futures are still holding narrow gains. The strong pressure developing in feeder cattle futures is the main driver of lower prices Monday morning, although limited volume is keeping traders from showing additional market shifts. Traders continue to focus on firming beef demand over the near future, but outside markets are likely to play a more significant role in the live cattle trade over the next few days. This may bring additional pressure to the complex. Cash cattle interest remains at a standstill following trade late last week. The day will be filled with inventory taking and show list distribution. Active bids and asking prices are not expected to be seen until late in the week. Open interest Friday added 3,421 positions (387,813). Spot month February contracts slipped 9,098 positions (85,379) and April contracts gained 7,889 positions (139,293). DTN projected slaughter for Monday is 117,000 head.

FEEDER CATTLE:

Open: $0.50 to $0.80 Lower. Light trade is slowly trickling into feeder cattle futures with moderate pressure focusing on pulling back from gains seen last week. The underlying tone of the market still remains firm, although continued pressure over the next couple of days and continued support in corn markets may spark increased longer term pressure to feeder cattle trade. Cash index for 1/10 is listed at $145.46 down $0.09. Open interest Friday added 61 positions (51,144).

LEAN HOGS:

Open: $0.50 to $1 Lower. Firm pressure is once again developing in lean hog trade given the overall weaker tone in all livestock markets early Monday. There still remains uncertainty about longer-term market pressure, but the inability to sustain cash market support early in the week could further pressure futures prices over the coming days. Cash hog trade is steady to $1 lower. Most bids are steady. Open interest fell 4,256 positions (203,385). February fell 6,560 positions (44,721) and April added 2,017 positions (70,007). Cash lean index for 1/10 is $56,69 up 0.70. DTN projected slaughter for Monday is 460,000 head.

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

(BAS)

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