DTN Before The Bell-Livestock

Follow-Through Buying Steps Into Cattle Trade

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

Light to moderate follow-through buyer support is stepping back into the cattle complex following the late-day rally Monday which may help to spark some additional February support through the entire market. This could draw increased trade interest into the morning activity, although outside markets will remain closely watched through the next few days. Corn futures are trading lower in light early trade. Stock markets are lower in light trade. Dow Jones is 180 points lower, while Nasdaq is down 31 points.

LIVE CATTLE:

Opening call: Steady to 50 cents higher. Light buyer support is slowly stepping back into the complex early Tuesday morning as traders continue to regain momentum following the strong buyer support seen over the last couple of trading sessions. This may help to draw both fundamental and technical support back into the complex through the morning. Cash cattle markets are expected to remain inactive, which will allow for additional focus on bids and asking prices to develop as the week develops. Active trade is not expected to be seen until later in the week. Open interest Monday slipped 991 positions (275,667). Spot February fell 2,710 positions (32,897) and April contracts fell 81 positions (115,904). DTN projected slaughter for Tuesday is 94,000 head.

FEEDER CATTLE:

Opening call: 50 cents to $1 higher. Moderate support is redeveloping early Tuesday following the late-day bounce in cattle trade Monday. The focus on increased support through the complex is helping to draw additional buyer activity into the market. This could spark additional interest into the market, but may not draw strong widespread volume back into the trade through the next couple of days Open interest Monday fell 807 positions (37,095). Cash index for 1/20 is 157.51 down 44.

LEAN HOGS:

Opening call: Mixed. Light to moderate pressure is seen through most of the lean hog futures markets with traders looking for additional direction from outside markets. The lack of trader volume and concern surrounding the widespread winter storm moving through the Midwest is limiting buyer support in the complex early Tuesday morning. But pressure is likely to remain limited to moderate pressure as fundamental selling interest is not likely to increase over the near future. Cash bids are expected to be steady to 50 cents lower with most bids expected steady. Open interest Monday 2,177 positions (181,913) Spot month February fell 2,177 positions (24,403) and April added 1,062 positions (75,231). Cash lean index for 1/21 is 57.84, up 0.64. DTN projected slaughter for Tuesday is expected to be around 365,000 head.

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

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Rick Kment