DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate to strong pressure is seen in lean hog and feeder cattle trade as traders continue to put emphasis on corn market prices and overall cost of production. Uncertainty for pork demand and export activity is creating concern following a move to three-month lows in lean hog trade. Corn markets are higher in active early trade. Stock markets are higher. Dow Jones is 28 points higher with NASDAQ up 62 points.

LIVE CATTLE:

Open: Mixed. Despite the sharp continued losses in feeder cattle trade, live cattle markets remain mixed in a narrow range. The focus on potential demand support through the upcoming days and weeks as well as underlying technical support above $103 per cwt is helping to spark some short term stability through the entire complex. Cash cattle markets are undirected following sluggish trade on Friday. Show list distribution and inventory taking should be the main focus during most of the day. Open interest Friday liquidated 1,332 positions (355,355). Spot month June contracts lost 1,100 positions (13,748) and August contracts fell 1,100 positions (150,380). DTN projected slaughter for Monday is 121,000 head.

FEEDER CATTLE:

Open: $1 lower. Strong follow through pressure is moving through feeder cattle trade with trades still heavily influenced by the strong upward movement in corn prices. This is adding increased overall softness through the complex as most contracts are trading at or near $1 per cwt lower. Trade is expected to remain extremely limited through most of the morning with initial losses holding at this point. Cash index for 6/13 is $133.36 up $0.07. Open interest Friday fell 183 positions (48,205).

LEAN HOGS:

Open: Steady to $1 lower. Firm follow-through pressure is seen early Monday in all lean hog trade as the focus on moving through short term support has sparked additional liquidation Monday morning. Deferred futures are leading the move lower with increased underlying pressure through the entire complex, and holding triple-digit losses during early trade. Cash hog trade is called steady to $1 lower with most bids steady. Open interest added 1,363 positions (307,827). June liquidated 480 positions (9,958) and July lost 6,302 positions (6,302). Cash lean index for 6/12 is $79.57, up 0.03. DTN projected slaughter for Monday is 477,000 head.

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

(CZ)

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