DTN Before The Bell-Livestock

GENERAL COMMENTS

LIVE CATTLE:

Open: 2 cents higher. August cattle are up $0.15 early, still looking for cash business to develop this week and keeping a watch on USDA's corn planting estimate, due out at 11 a.m. CDT. After dropping roughly $19.00 from the high in March to the lowest prices in a year, August cattle now appear to be finding support near their lows at $102.00. The U.S. economy is expected to show slower growth the next two quarters, but prices may have largely adjusted for that and noncommercial net long positions have been trimmed to a more modest 66,261 contracts. Cash cattle have not traded yet much this week and are due for some business later Friday, but won't find much help from this week's lower boxed beef prices. So far, cash bids have been roughly $107 in the South and $175 in the North. USDA estimated Thursday's slaughter at 122,000. Total open interest was down 620 to 350,602 on Thursday's slightly lower trade. August contracts fell 3,347 to 142,957 and October increased 2,614 to 98,683.

FEEDER CATTLE:

Open: 30 cents higher. August feeder cattle are up $0.65 early with traders not showing much concern ahead of USDA's corn planting estimate, due out at 11 a.m. CDT. August feeder cattle prices have dropped nearly $30 from their April high as corn prices have climbed higher and may be ready to find support near $130. Commercials remain net long, which is a source of support, but traders still have to survive Friday's Acreage report from USDA. The Feeder Cash index for June 26 is listed at $131.87, down $1.12 from a week ago. Total open interest declined 519 to 49,388 on Thursday's slightly lower trade.

LEAN HOGS:

Open: 82 cents lower. August hogs are down $.90 early Friday, a bearish response to Thursday's USDA report showing 75.5 million head of hogs and pigs, the most on record and up a more-than-expected 4% from a year ago. The March-to-May pig crop was also up 4% from a year ago, another sign of bearish expansion. August hogs have already fallen over $20 from their April high, but may have further to go after Thursday's bearish report. USDA estimated Thursday's slaughter at 479,000. The Lean Hog Index for June 26 was estimated at $77.26 down $2.29 from a week ago. Cash hog trade is expected to be lower early Friday as pork carcass values have dropped over $4 in the last seven days. Total open interest was up 1,158 to 296,117 on Thursday's higher trade. Open interest in the August contract was up 278 to 85,161 while October contracts were up 860 to 66,416.

Todd Hultman can be reached at Todd.Hultman@dtn.com

(CZ)

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