DTN Before The Bell-Livestock

Mixed Trade Limits Volume

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

Light to moderate pressure is seen in lean hog trade as traders come back to reality with the focus still on uncertainty of pork demand moving to China. Limited volume may keep losses narrow as the day continues. Cattle trade remains mixed in a narrow range as initial movement is keeping markets generally stable. Corn markets are lower in light early trade. Stock markets are higher. Dow Jones is 106 points higher with NASDAQ up 70 points.

LIVE CATTLE:

Open: Mixed. Initial moves in live cattle futures are based on position taking as traders try to adjust holdings following the strong market rally Monday. Limited volume early Tuesday is allowing for this market shift, which may add increased softness to the entire complex over the rest of the morning, although traders continue to focus on the direction of outside markets as well as beef value shifts through the week. Cash cattle activity remains undeveloped with bids and asking prices still hard to pin down. It is expected that limited bids will surface sometime over the next couple of days, especially in the South with the recent trend of early-week trade in these areas sparking interest sooner than later. Open interest Monday reduced 96 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 Tuesday is 121,000 head.

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FEEDER CATTLE:

Open: Mixed. Narrow trading ranges are seen through the entire feeder cattle complex early Tuesday as traders try to assess the ability to sustain and continue the early-week rally. Trade is hovering from 10 cents lower to 20 cents higher with most contracts steady to higher during initial trade. The inability to spark aggressive follow-through gains in live cattle trade following limit moves Monday is causing some softness in all cattle markets. Cash index for 6/7 is $132.26 up $0.45. Open interest Monday lost 220 positions (48,633).

LEAN HOGS:

Open: Steady to $1 lower. Light to moderate pressure is moving into lean hog trade early Tuesday morning with the focus on recent market volatility and wide trade ranges. The lack of consistent day-after-day market moves in the same direction is creating longer-term uncertainty through the entire market, leaving traders looking for short-term positions rather than market direction. Nearby contracts are holding narrow losses although firm pressure is seen in late 2019 contracts based on the expectations that moderate market shifts will continue to develop through the rest of the summer. Cash hog trade is called steady to $1 lower with most bids steady. Open interest fell 202 positions (316,082). June liquidated 1,223 positions (12,819) and July liquidated 2,524 positions (69,159). Cash lean index for 6/7 is $79.95, down 0.35. DTN projected slaughter for Tuesday is 478,000 head. Saturday runs are expected at 63,000 head.

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

(CZ)

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Rick Kment