DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade is seen in livestock trade with lean hog and cattle futures holding moderate to firm gains while pressure in feeder cattle futures is focusing on pre-holiday adjustments. Corn markets are higher in light trade. Stock markets are higher. Dow Jones is 55 points higher with NASDAQ up 25 points.

LIVE CATTLE:

Open: Steady to 80 higher. Firm midweek gains are trickling into the lightly traded live cattle complex. This is helping to spark some additional underlying moves through the complex, although traders continue to focus on potential firm support developing in all cattle trade through early July. The potential for increased underlying support in cash cattle and beef values through the first two weeks of the month is likely to add bullish underlying support to the entire futures trade. Cash cattle interest remains sluggish Wednesday morning with bids undeveloped at this point. Asking prices remain firm at $111 and higher live and $182 dressed. It is expected that packers will become much more active as the morning continues as both sides desire to trade cattle before the end of the day. Open interest Tuesday fell 1,893 positions (349,619). Spot month August contracts lost 3,967 positions (133,847) and October contracts added 1,279 positions (103,594). DTN projected slaughter for Wednesday is 122,000 head.

FEEDER CATTLE:

Open: Mixed. Following early-week support in feeder cattle, prices remain mixed in a narrow range. Traders are adjusting positions due to the limited volume in the market Wednesday as well as trying to square positions in front of the day off Thursday. Limited market direction is expected to be seen in all livestock trade during the morning as markets close early ahead of the holiday. Limited additional long-term direction is seen in grain trade, which may keep feeder cattle traders from showing significant market shifts before next week. Cash index for 6/28 is $132.61 up $0.76. Open interest Tuesday added 490 positions (49,109).

LEAN HOGS:

Open: Steady to $1 higher. Moderate buyer interest is moving back into the complex following the market correction seen Tuesday. Traders continue to look for increased underlying technical support through the complex. The fact that markets will trade on an abbreviated schedule Wednesday is limiting overall trade activity, which may allow for additional price swings through the day. Markets will remain closed Thursday, which is causing for some additional pre-holiday adjustments. Cash hog trade is called steady to $1 lower, with most bids steady. Open interest added 6 positions (298,201). July fell 1,291 positions (19,569) and August lost 1,012 positions (82,590). Cash lean index for 6/27 is $76,05, down 1.21. DTN projected slaughter for Wednesday is 477,000 head. Saturday runs are expected at 190,000 head.

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

(CZ)

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