DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate to firm gains are developing in livestock trade following the sharp end of week losses last week. Even though volume remains extremely light traders are focusing on short-covering activity Monday morning. Corn markets are lower in light early trade. Stock markets are higher. Dow Jones is 158 points higher with NASDAQ up 99 points.

LIVE CATTLE:

Open: Steady to 80 cents higher. Live cattle futures are leading the cattle complex higher as traders focus on regaining losses seen late Friday. With the threat of tariffs on Mexican imports now behind us for the time being, there is increased focus on moving forward with beef exports to many of our trading partners. Short covering is expected to be the main focus of trade Monday morning as traders need to stabilize the market before moving onto long term support. Cash cattle interest remains quiet following light trade last week. Although packers are entering the week short bought, the overall softness in price levels through early June continues to limit trade interest through the entire complex. Bids and asking prices are likely to slowly develop over the next couple of days, although the early-week trade last week could stimulate additional movement in the South as packers seem to be buying cattle earlier and earlier through the late spring and early summer. Open interest Friday fell 7,137 positions (366,200). Spot month June contracts lost 7,512 positions (21,979) and August contracts fell 677 positions (155,308). DTN projected slaughter for Monday is 121,000 head.

FEEDER CATTLE:

Open: Steady to 50 cents higher. Light buyer interest moved into feeder cattle early Monday following the sharp late week tumble seen across the entire complex Friday afternoon. Buying is focused on short covering positions as tariffs which were set to go into effect on Mexican products have been averted due to a late Friday deal. This should help to regain market support Monday as commercial traders are steadily returning to the market. Cash index for 6/6 is $131.84 up $0.11. Open interest Friday added 103 positions (48,633).

LEAN HOGS:

Open: Steady to $1 higher. Limited support is steadily moving into the lean hog complex following limit losses Friday. Now that the threat of tariffs on Mexican products has eased due to a late Friday deal, buyers are moving back into the complex. It is uncertain just how much underlying support will develop Monday as expanded trading limits are available to allow prices to shift $4.50 per cwt in either direction through the session. Limited volume is expected through most of the morning with little new market news available across the pork complex. Cash hog trade is called steady to $1 lower with most bids steady to weak. Open interest added 130 positions (316,082). June liquidated 1,223 positions (12,819) and July liquidated 2,524 positions (69,159). Cash lean index for 6/6 is $80.30, down 0.26. DTN projected slaughter for Monday is 473,000 head.

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

(CZ)

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