DTN Before The Bell-Livestock

GENERAL COMMENTS

Livestock futures are mixed in limited volume. April lean hog futures have posted the most significant support with a $1 per cwt gain in opening minutes of trade. The focus on short covering is the main priority early Tuesday. Cattle futures are firming, although limited moves have been seen through the entire complex. Corn markets are lower in light early trade. Stock markets are mixed. Dow Jones is 22 points lower with Nasdaq up 2 points.

LIVE CATTLE:

Open: Steady to 60 cents higher. Firm buyer support has continued to slowly develop in nearby contracts with the lightly traded February contracts showing the most price support thorugh morning trade. Stable but firm buying interest is seen in all spring and summer contracts as limited volume is pushing prices back near contract highs with the focus of firm underlying support helping to stabilize market gains. Traders will continue to closely focus on outside market direction as well as potential buyer activity in beef markets. Cash cattle interest still remains sluggish with bids and asking prices unavailable at this point. It is likely to be midweek or later before bids develop, and potentially the end of the week once again before active trade is seen. Open interest Monday added 399 positions (399,817). Spot month February contracts lost 1,378 positions (2,000) and April contracts fell 2,074 positions (156,444). DTN projected slaughter for Tuesday is 116,000 head.

FEEDER CATTLE:

Open: Mixed. Narrow trading ranges are developing once again with prices hovering in a narrow range from 10 cents lower to 15 cents higher. Most contracts are contained within a single-digit trading range as the focus continues to be based on further pressure in corn markets. Cash index for 2/21 is $141.61 up $0.30. Open interest Monday gained 720 positions (50,896).

LEAN HOGS:

Open: Mixed. Firm gains have redeveloped in nearby trade with April futures holding a $1 per cwt rally just after opening bell. This renewed support seen early Tuesday seems to be helping to add some stability to the complex, although traders seem to be focused on strength in outside markets and follow through gains in the cattle trade. Deferred lean hog trade remains under pressure, as sluggish demand growth and readily available pork supplies still keeps traders cautious about long term gains. Cash hog trade is steady to $1.00 lower. Bids are scattered through the range. Open interest gained 4,242 positions (249,116). April added 1,839 positions (105,346) and June added 248 positions (44,870). Cash lean index for 2/22 is $53.13 down $0.52. DTN projected slaughter for Monday is 477,000 head. Saturday runs are expected to reach 195,000 head.

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

(BAS)

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