DTN Before The Bell-Livestock
Cattle Futures Mixed Early Monday
Firm gains are slowly but steadily developing in lean hog trade as follow-through buying is picking up where traders left off Friday. This may add some additional midday volatility as traders try to gain support from fundamental market shifts through the middle of July. Cattle futures are hovering in a narrow trading range as prices are mostly lower in initial trade. Corn markets are lower in light trade. Stock markets are lower. Dow Jones is 7 points lower with NASDAQ down 2 points.
LIVE CATTLE:
Open: Mixed. Spot month August contracts remain the lone positive contract Monday morning with narrow losses seen through the rest of the market. Most of the early pressure is based on position covering as losses are hovering from 5 to 15 cents per cwt. Outside market direction will once again be a major focus on the direction of live cattle trade as traders try to defend previous gains, but also focus on overall consumer interest through the rest of the summer, economic strength will be essential in order to spark additional strong demand over the coming months. Cash cattle activity is expected to remain undeveloped with showlist distribution and inventory taking the focus Monday. Bids and asking prices are not likely to develop during the day with active trade not expected until mid to late week. Open interest Friday lost 615 positions (331,643). Spot-month August contracts lost 7,572 positions (74,354) and October contracts added 7,089 positions (138,558). DTN projected slaughter for Monday is 121,000 head.
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FEEDER CATTLE:
Open: Mixed. Narrow trading ranges are seen early Monday with traders shifting markets mostly lower from 10 to 20 cents lower. November futures are holding single-digit gains during early trade as traders try to back away from recent market adjustments seen Friday. This could allow for light to moderate price shifts through most of the morning, as traders look for increased direction through the complex. Cash index for 7/10 is $139.32, up 3.56. Open interest Friday lost 96 positions (48,817).
LEAN HOGS:
Open: Steady to $1.20 higher. Firm follow-through support developed in lean hog trade early Monday morning as increased underlying technical support is developing through the complex following the strong market rally last week. This is helping to instill additional confidence in noncommercial traders that have been active in the market over the last few months, as well as spark renewed commercial buying interest. Cash hog trade is called $1 lower to 50 cents higher, with most bids steady. Open interest added 3,933 positions (286,012). July fell 594 positions (11,021) and August lost 2,821 positions (51,985). Cash lean index for 7/11 is $70.73, up 0.08. DTN projected slaughter for Monday is 420,000 head.
Rick Kment can be reached at rick.kment@dtn.com
(CZ)
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