Monday Morning Early Calls

| June 3, 2013 | 9:40 am
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Harold House with the Kansas City Trade Group markets are starting the week out higher across the board. Click below to hear KMZU’s Mandy Young talk with Harold House from the Kansas City Trade Group.

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Early Livestock:

The cattle complex at the CME seems set to open on both sides of unchanged thanks to spillover buying on one hand and beef demand nervousness on the other. Lean hog futures should also begin on a mixed basis tied to follow-through buying and early week profit taking.

Cattle:     Cash: Steady-1 Lower     Futures: Mixed    Live Equiv.  $139.60 -$1.12

Although cattle feeders were successfully late last week in making packers pay steady money (i.e., $124 in the South, mostly $200 in the North), final trade volume totals seemed quite small. Frankly, we’re not sure which side was served best by the limited business. On one hand, it means that cattle buyers will once again start a new week fairly short bought. On the other hand, feedlot offerings are likely to be larger given carried over steers and heifers. The scale of bargaining power may be tipped by the tone of the boxed beef trade. Early asking prices should be around $126 in the South and $203-plus in the North. Live and feeder cattle futures should open with mixed prices due to a combination of follow-through buying and beef demand uncertainty.

Hogs:       Cash: Steady- $0.50 Higher      Futures: Mixed    Lean Equiv.  $101.47 – $0.79

We anticipate the hog buyers will start work Monday morning with steady/firm prices. They have been fighting a tough battle against tightening reading numbers of barrow and gilts since late April, and that could persist for another 30-45 days. Look for weekly slaughter totals to slowly contract between now and midsummer, a trend as much fueled by poor processing margins as the seasonal reality and implication of a smaller winter pig crop. Lean hog futures area also staged to start out with uneven price action, moderately scrambled by residual buying and profit taking.

Early Grains:

Grain contracts were higher for much of the overnight session, led by the bean complex. New-crop corn was sluggish, posting a relatively narrow 8-cent range while trading either side of unchanged.

Outside Markets:

Outside markets were bullish with the U.S. dollar index lower, allowing metals and energies to rally.  The Dow Jones Industrial Average closed 208.96 points lower Friday at 15,115.57. The overnight session saw the Dow Jones futures trade 48-points higher, indicating U.S. stocks could see renewed buying interest early Monday. The overnight crude oil market was $0.19 higher at $92.16 while Brent crude was $0.57 higher at $100.96. The August gold contract gained $2.50 at $1,395.50, while the U.S. dollar index lost 0.297 at 83.078.

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