DTN Before The Bell-Livestock

GENERAL COMMENTS

Very limited interest is seen in all livestock trade Monday morning as traders seem content with late week positioning ahead of the cattle reports. This is keeping prices hovering in a narrowly mixed range. Hog futures remain mixed to mostly higher as continued underlying buyer support based on last week's support is being tempered by limited position taking. Corn markets are lower in light trade. Stock markets are higher. Dow Jones is 32 points higher with NASDAQ up 54 points.

LIVE CATTLE:

Open: Mixed. Sluggish market interest and price movement is seen in all live cattle trade early Monday morning with prices hovering from 17 cents lower to 15 cents higher. The increased overall cattle-on-feed levels seen Friday were already factored into the market in pre-report estimates. This is keeping trade sluggish through the entire complex and may limit overall market activity through most of the Monday session. Cash cattle activity is expected to remain extremely limited through the morning with show list distribution and inventory taking the main focus early in the week. Given the light to moderate trade seen last week, it is expected that active trade will be delayed until midweek or later. Bids and asking prices are likely to remain subdued over the next couple of days. Open interest Friday added 17 positions (323,730). Spot month August contracts lost 2,193 positions (52,736) and October contracts added 1,058 positions (146,949). DTN projected slaughter for Monday is 121,000 head.

FEEDER CATTLE:

Open: Mixed. Narrow trading ranges are seen early Monday morning with prices hovering from 10 cents lower to 15 cents higher in limited initial volume. With cattle placements in Friday's cattle on feed report coming in near estimated levels, the overall direction of the complex continues to focus on recent market firmness and the potential to bring additional underlying support back to the complex early in the week. This may spark some additional but limited price support Monday morning. Traders continue to focus on the direction of grain trade, which has shifted lower once again Monday morning, and may add increased gains in nearby feeder cattle trade through the next couple of days. Cash index for 7/17 is $140.00, down 1.01. Open interest Friday fell 175 positions (48,006).

LEAN HOGS:

Open: Mixed. Market softness slowly developed in front-month August contracts Monday morning as traders tried to square positions following the strong underlying rally over the last week. The limited losses in spot-month losses is not expected to significantly change the bullish tone, with firm gains developing through other nearby contracts. It is expected that additional limited buyer activity may move back into the complex through the morning, but prices may continue to hover in a narrow to moderate range. Cash hog trade is called steady to $1 higher, with most bids $1 higher. Open interest added 8,301 positions (281,043). August fell 1,823 positions (34,334) and October added 3,419 positions (100,364). Cash lean index for 7/18 is $72.40, up 0.88. DTN projected slaughter for Monday is 470,000 head.

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

(CZ)

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