DTN Before The Bell Livestock

GENERAL COMMENTS:

Strong gains are seen across the livestock market with increased underlying support holding following last week's gains. There still remains concern about packers ability to process cattle and hogs, but the market seems to feel the worst is behind them at this point. Corn prices are lower in light trade. Stock markets are mixed. Dow Jones is 189 points lower with NASDAQ up 34 points.

LIVE CATTLE:

Open: $1 Higher. Active gains are quickly moving into live cattle futures. The continued surges in wholesale beef values is sparking some spillover interest as futures traders not only focus on the support in meat prices, but also increased packing capacity that is expected over the coming days. Limited buying may continue to be seen, but the firm gains could help to drive additional momentum into the market through the first half of the week. Cash market activity still remains undeveloped with show list distribution and inventory taking the main focus Monday. Bids and asking prices may not be seen until near midweek with sales likely to be distributed through the last half of the week. Open interest added 40 positions (265,153). April contracts lost 213 positions (1,041) and June contracts fell 495 positions (116,351). DTN projected slaughter for Monday is 81,000 head.

FEEDER CATTLE:

Open: Steady to $1 Higher. Strong support is seen in all cattle futures as follow through buying after last week's gains is moving into the market. Although there still remains questions about the ability to move additional cattle into already filled feedlots, the potential that packer activity will increase over the coming days should spark some underlying support in feeder cattle markets. Cash index for 4/30 is $119.39, up 0.76. Open interest Friday fell 880 positions (32,576).

LEAN HOGS:

Open: Steady to $4 Higher. Underlying support is slowly developing in nearby contracts. Although strong gains are seen in May futures, the lack of overall trade interest in the contract means very little for overall market direction. June futures are still holding firm gains as traders continue to focus on the potential for short term support as packers try to gain more traction with limited production increases expected in the next couple of days. This could add even more uncertainty for long term markets with demand uncertainty still developing. Cash hog trade is called steady to $1 higher. Most bids are steady to $0.50 higher. Open interest fell 1,582 positions (207,883). June fell 1,527 positions (64,803) and July added 157 positions (32,478). Cash lean index for 4/30 is $57.27, up 2.84. DTN projected slaughter for Monday is 296,000 head.

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

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

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