DTN Before The Bell-Livestock

GENERAL COMMENTS

Light to moderate buying is slowly developing Tuesday as traders try to cover positions following aggressive early-week losses. Hog futures are leading the complex higher, although markets are expected to show limited gains due to the underlying bearish nature of the complex. Corn markets are higher in light trade. Stock markets are lower. Dow Jones is 56 points lower with NASDAQ down 23 points.

LIVE CATTLE:

Open: Steady to 40 cents higher. Limited support is slowly trickling into live cattle trade Tuesday morning. The inability to spark additional pressure in any livestock trade is helping to firm interest in nearby and deferred live cattle futures. Even with light to moderate gains, the tone of the market remains extremely weak, with traders uncertain about the ability to break away from contract lows through the upcoming days. Cash cattle interest remains extremely weak with bids and asking prices still undeveloped. It is likely that a few bids and asking prices may be seen through the day, but overall trade is likely to hold off until the last half of the week. Recent midweek movement in the South could help to stimulate some interest over the next couple of days, but with end of the month buying developing this week, packer interest may be slow to develop. Open interest Monday added 969 positions (349,659). Spot month June contracts lost 865 positions (3,418) and August contracts added 640 positions (146,668). DTN projected slaughter for Tuesday is 121,000 head.

FEEDER CATTLE:

Open: Mixed. Following a light to moderate bounce higher at opening bell, feeder cattle futures are mixed in a narrow trading range. An attempt to cover short positions following establishing contract lows early in the week is starting to limit trade interest through the morning. Prices may remain focused in a narrow range through most of the session as the underlying tone of the market remains bearish, but given the recent market pressure, selling interest in order to push prices even lower may be very limited. Traders will closely focus on live cattle and corn market direction through the session, with narrow market shifts likely through the entire day. Cash index for 6/21 is $131.47 up $0.10. Open interest Monday added 569 positions (49,528).

LEAN HOGS:

Open: 50 cents to $1 higher. Active buyer support is moving into lean hog trade early Tuesday morning. Following active sharp pressure of $6 to $6.50 per cwt over the last two sessions, the complex remains significantly oversold and ripe for a market correction. Moderate buying moved into the complex, establishing long term lows following Monday's close, but the tone of the market still remains extremely weak, due to technical and fundamental pressure mounting through the entire complex. Cash hog trade is called steady to $2 lower with most bids steady to $1 lower. Open interest added 3,045 positions (297,405). July fell 1,445 positions (25,124) and August added 2,429 positions (85,703). Cash lean index for 6/21 is $78.65, down 0.49. DTN projected slaughter for Tuesday is 477,000 head. Saturday runs are expected at 57,000 head.

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

(CZ)

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