DTN Before The Bell Livestock

GENERAL COMMENTS:

Livestock markets are very lightly traded with notable trader absence ahead of Thursday's holiday likely to keep prices well contained. It is very likely trade will remain quiet until next week. However, abrupt outside market shifts could still shake up livestock markets due to the inactivity. Corn is lower in light to moderate trade. Stock markets are lower in limited morning trade. Dow Jones is 188 points lower with NASDAQ down 5 points.

LIVE CATTLE:

Open: Mixed. Live cattle futures remain stuck in a narrowly mixed trading range early Wednesday morning; prices are posting single-digit moves in most contract months. The overall lack of direction is not unusual in pre-holiday trade and market stability is likely to be seen all session long. Cash cattle markets are still generally quiet with more interest expected through the end of the day. A few initial bids are starting to develop in Texas at $108 per cwt. This would be generally $2 per cwt lower than last week. Asking prices remain at $112 and higher, but with the upcoming holiday weekend and uncertainty about how many cattle packers need to purchase before the end of the month, market direction is less certain. Open interest slipped 548 positions (276,341). December contracts lost 3,059 positions (26,846) and February contracts added 1,680 positions (111,778). DTN projected slaughter for Tuesday is 120,000 head.

FEEDER CATTLE:

Open: Steady to 50 cents higher. Spillover buyer support is slowly but steadily moving into a quietly traded market. The focus will likely be the ability to maintain previous market support through and after the holidays. Although very little trade is expected Wednesday, the concern is wild shifts in outside markets have the potential to shake livestock markets up. However, the probability of a major shift in the market remains low, but given the fact that trader interest is very light it doesn't take much to create a market shift in these pre-holiday sessions. Cash index for 11/20 is $136.95, up 0.20. Open interest Tuesday added 687 positions (36,470).

LEAN HOGS:

Open: Steady to 40 cents higher. Light buyer support is slowly but steadily moving into lean hog trade despite the limited volume in the complex. It is expected that very little additional momentum will be seen in the complex through the rest of the day. Even if market activity is subdued, the threat of wide market swings continues to be possible as a lightly populated market has a tendency to allow wider and unsupported market shifts. Traders continue to focus on the ability to stabilize cash hog and pork cutout price levels through the end of the month. But so far, there seems little interest in fundamental support given the current supply of hogs and pork in the system. Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady 50 cents lower. Open interest added 499 positions (203,018). December fell 2,033 positions (25,947) and February gained 1,560 positions (81,859). Cash lean index for 11/23 is $67,83, down 0.31. DTN projected slaughter for Wednesday is 488,000 head. Saturday runs are expected at 379,000 head.

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

Editor's Note: See DTN Livestock Analyst ShayLe Stewart's complete 2021 market outlook live by attending the DTN Ag Summit, Dec. 7-9. This year's event is virtual, and as a DTN subscriber you can attend for FREE. Our premier farmer and rancher event features markets updates from ShayLe, DTN Lead Analyst Todd Hultman and a weather outlook by Senior Ag Meteorologist Bryce Anderson. Other speakers include: U.S. Ambassador Kip Tom; Ken Eriksen and Paul Hughes of IHS Markit; Microsoft Chief Scientist Ranveer Chandra; personal development speakers David Horsager and Jon Gordon; farmers Reid and Heather Thompson; farm blogger Meredith Bernard, and many more.

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