DTN Early Word Opening Livestock 05/09 05:57

DTN Early Word Opening Livestock 05/09 05:57 Cattle Futures Ripe to Open With Sharp Gains Look for cattle futures to open Monday significantly higher, powered by aggressive feedlot spending in feedlot country. Lean hog contracts seem likely to open moderately higher, supported by spillover buying from the cattle complex and early-week short-covering. By John Harrington DTN Livestock Analyst Cattle: Steady-$2 HR Futures: 100-200 HR Live Equiv $137.11 - .58* Hogs: Steady-$1 HR Futures: 25-50 HR Lean Equiv $ 86.64 -1.48** * based on formula estimating live cattle equivalent of gross packer revenue ** based on formula estimating lean hog equivalent of gross packer revenue GENERAL COMMENTS: Just when many cattle-market watchers had ordered the tombstone for the seasonal bull move, packer spending suddenly exploded, chasing tight fed supplies on Friday as much as $4 to $6 higher on a live basis (i.e., $128 to $130) and $4 to $6 dressed (i.e., mostly $198 to $200).Trade volume seemed to be decent in most areas. Yet most transactions inked last week seemed to include relatively short-term delivery specs. Cattle buyers could be looking for more live inventory by Thursday or Friday. On the other hand, processing margins narrowed significantly last week as the cost of live inventory surged higher and carcass value continued to drop like a stone. At any rate, cash activity Monday will be limited to the distribution of new showlists. We expect the offering of ready cattle to be about steady with last week. Our guess is that asking prices will start out around $133 to $135 in the South and $206 plus in the North. Live and feeder futures should open sharply higher, supported by evidence of new life in the cash trade.