DTN Before The Bell Livestock

Active Cattle Gains Spark Market Interest

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

GENERAL COMMENTS:

Early morning trade is sparking mixed trade through livestock markets with gains in cattle futures offset by light to moderate hog market losses. The focus on continued light trade volumes during another week or holiday reduced trading schedules could keep markets volatile. Corn is trading higher in light to moderate trade. Stock markets are higher in limited morning trade. Dow Jones is 264 points higher with NASDAQ up 93 points.

LIVE CATTLE:

Open: Steady to $1 higher. Firm underlying support is seen in all live cattle futures following renewed optimism surrounding recent cash cattle gains and the potential to instill further support once boxed beef values are reported early in the week. This could help to spark additional firm support with February futures moving above intermediate resistance levels through morning trade. Cash cattle trade activity is quiet with bids and asking prices not expected most of the day Monday. Although trade will likely develop midweek, the focus on full plant schedules during early January continues to point to renewed buyer activity over the next couple of weeks. Open interest added 458 positions (287,286). December contracts lost 591 positions (2,396) and February contracts slipped 671 positions (112,312). DTN projected slaughter for Monday is 116,000 head.

FEEDER CATTLE:

Open: Mixed. Wide ranging trading ranges are seen early Monday morning. Although there continues to be follow-through support in several contract months due to higher live cattle prices, the limited volume in the market is keeping price gains subdued with select contracts focusing on position squaring opportunities following recent gains. Once additional volume moves into the market during late morning, the focus on renewed buyer strength for 1st quarter contracts could help to solidify additional market gains. Cash index for 12/21 is $139.74, up 0.18. Open interest Thursday added 158 positions (45,377).

LEAN HOGS:

Open: Steady to 50 cents lower. Light losses have trickled into lean hog futures following very limited activity Monday morning. The focus on firm market support in most outside markets seems to be limiting overall buyer support in nearby and deferred lean hog futures, although the underlying focus in the complex continues to be moving to long-term demand support in the market. Trade is expected to remain quiet through most of the week, with many traders still absent from the market due to the holidays. Cash hog bids are expected $1 lower to $1 per cwt higher, with most bids steady 50 cents lower. Open interest added 1,773 positions (183,938). February fell 142 positions (78,947) and April added 750 positions (42,138). Open interest in pork cutout futures added 29 positions (670). Cash lean index for 12/22 is $62.04, down 0.51. DTN projected slaughter for Monday is 468,000 head.

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

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Rick Kment