DTN Before The Bell-Livestock

GENERAL COMMENTS

Sluggish market movement is seen early Monday morning with traders focusing on light to moderate pressure redeveloping in hog futures as traders continue to search for meaningful support levels. Limited buying is developing across the cattle complex, as traders try to expand on end-of-week gains, and counter the recent market correction seen through the complex. Corn markets are lower in light early trade. Stock markets are mixed. Dow Jones is 30 points lower with Nasdaq up 22 points.

LIVE CATTLE:

Open: Mixed. Limited activity is seen Monday morning as traders trickle back into the complex. The light gains at the end of last week has helped to bring about follow-through buyer support in nearby contracts. But prices remain stuck in a very narrow trading range from 22 cents lower to 30 cents higher based on the lack of widespread market direction and concern that activity will be contained to a narrowing market range. Cash cattle markets are silent Monday morning with the focus on show list distribution and inventory taking through the day. Bids and asking prices are not expected to be seen until midweek, with most trade likely to be the last half of the week once again. Open interest Friday fell 3,000 positions (384,257). Spot month February contracts slipped 3,843 positions (28,697) and April contracts added 193 positions (164,122). DTN projected slaughter for Monday is 119,000 head.

FEEDER CATTLE:

Open: Steady to 40 cents higher. Light pressure in corn trade early Monday has added market limited but supportive buying to nearby feeder cattle trade as traders move back into the complex. This is allowing nearby contracts to lead the complex higher with March contracts moving back to $143.00 per cwt in early trade. The strong market pressure seen over the last week is creating the potential for buyer to step into the market as they try to establish a more stable trading range. Cash index for 1/31 is listed at $141.86 down $0.71. Open interest Friday added 950 positions (51,703).

LEAN HOGS:

Open: 10 to 50 cents lower. Limited pressure has slowly developed early Monday morning as the inability to stabilize trade early in the week is increasing additional bearish tones through the entire complex. As packers return to full schedules during early February, there is going to be even more emphasis on supply levels which may continue to put even more product into storage through the upcoming weeks and months. Cash hog trade is steady to $1 lower. Most bids are 50 cents lower. Open interest gained 2,874 positions (220,708). February lost 1,224 positions (19,130) and April added 1,077 positions (93,647). Cash lean index for 1/31 is $57.18 down $0.22. DTN projected slaughter for Monday is 477,000 head.

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

(BAS)

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