DTN Before The Bell-Livestock

Mixed Trade Following Weekend Breather

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

Livestock futures are mixed in a narrow to moderate range as limited volume is seen early Monday. There is expected to be increased trade activity as the session continues, with traders looking for increased underlying support through the rest of the month. Corn markets are higher in light trade. Stock markets are lower. Dow Jones is 107 points lower with NASDAQ down 68 points.

LIVE CATTLE:

Open: Steady to 20 cents higher. Limited support is trickling into the complex as traders look for additional follow through gains after Friday's market rally. The fact that overall volume remained light at the end of the week, could cause traders to adjust previous gains and leave prices hovering in a moderate range through the first half of the week. Traders are also focusing on the potential for increased underlying support through beef values over the next couple of weeks, helping to sustain previous market gains. Cash cattle activity remains quiet Friday morning with bids unavailable at this point. It appears that most needed trade wrapped up before the end of the day Wednesday. There may be a few clean up sales developing through the day Friday, but in general market activity is expected to remain very quiet. Cash cattle activity remains sluggish with bids and asking prices undeveloped. Show list distribution and inventory taking will be the main focus through the entire day. Open interest Friday fell 903 positions (349,543). Spot month August contracts lost 2,777 positions (131,061) and October contracts added 3,107 positions (106,662). DTN projected slaughter for Monday is 120,000 head.

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FEEDER CATTLE:

Open: Steady to 50 cents higher. Limited follow-through buying slowly moved into the complex, allowing for increased underlying buyer support to develop Monday. There still remains uncertainty surrounding moved in corn trade and how feeder cattle traders will react to production cost changes. Limited buyer activity is expected through the morning, which should leave prices hovering in a narrow but positive trading range. Cash index for 7/2 is $133.94, unchanged. Open interest Friday added 619 positions (50,619).

LEAN HOGS:

Open: Mixed. Light to moderate gains are holding in nearby contracts with traders focusing on short covering opportunities in the opening minutes of trade August futures are holding firm gains of 85 cents per cwt, although the sharp losses Friday still leaves the overall market under pressure and trading in the lower end of the trading range. Cash hog trade is called steady to $2 lower, with most bids steady to $1 lower. Open interest fell 1,798 positions (296,922). July fell 1,159 positions (18,055) and August lost 105 positions (82,257). Cash lean index for 7/3 is $72.83, down 0.49. DTN projected slaughter for Monday is 477,000 head.

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

(CZ)

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Rick Kment