DTN Before The Bell-Livestock

GENERAL COMMENTS

LIVE CATTLE:

Open: 15 cents higher. August cattle are down $0.25 early, not showing much influence from a higher start for feeder cattle or Tuesday's larger-than-expected gain in U.S. retail sales. After a three-month decline, August cattle prices found support at $102 and are now challenging their highest prices in over a month. However, it is difficult to see much upside potential while supplies appear adequate, the slaughter pace is up only slightly from a year ago and the economy is expected to be slower in the second half of 2019. It is too early to know much about cash cattle this week and so far boxed beef prices are slightly lower after last week's cash cattle trades were roughly $2 to $3 higher. USDA estimated Tuesday's slaughter at 121,000, up from 119,663 a year ago. Total open interest was down 556 to 330,887 on Monday's slightly higher trade. August contracts fell 8,270 to 66,050 and October increased 6,141 to 144,637.

FEEDER CATTLE:

Open: 30 cents lower. August feeder cattle are up $0.50 early with corn prices trading down 9 cents, a seconc day lower. After a roughly $30.00 drop earlier this summer, exacerbated by higher corn prices, August feeder cattle appear to have found support around $131, thanks to help from commercial buying. The Feeder Cash index for July 12 is listed at $140.46, up $6.09 from a week ago. Total open interest declined 193 to 48,568 on Monday's slightly higher trade.

LEAN HOGS:

Open: 50 cents higher. August hogs are up $0.50 early Tuesday, holding above their 2019 lows with plenty of uncertainty about the state of the world's pork supplies. Hog prices have already seen one up and down roller coaster this year related to perceptions about the spread of African swine fever in Asia, but more may be coming as the disease continues to threaten new areas. On Monday, Dow Jones cited Chinese authorities as saying the sow herd is now down 27% from a year ago. With those kind of ongoing concerns, August hog prices have found support near their 2019 low of $74.00. USDA estimated Tuesday's hog slaughter at 474,000, up from 459,199 a year ago. The Lean Hog Index for July 12 was estimated at $70.73 down $1.19 from a week ago. Cash hog trade is expected to be steady to higher early Tuesday as pork carcass values have dropped over $4 in the last seven days. Total open interest was up 1,835 to 287,377 on Monday's higher trade. Open interest in the August contract was down 1,325 to 50,545 while October contracts were up 2,574 to 93,564.

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

(CZ)

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