DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade is quickly seen through the livestock market with traders not only trying to adjust to previous market shifts, but also square positions before the end of the year. This may leave markets in a narrow but mixed range through most of the session. Corn futures are lower in light trade. Stock market futures are higher, Dow Jones is 37 points higher while Nasdaq is up 7 points.

LIVE CATTLE:

Open: Mixed. Sluggish trade is seen early in live cattle futures with prices trading in a moderately mixed range from 10 cents lower to 40 cents higher. The firm support in nearby contracts is helping to draw trade activity back into the complex, although the pressure seen in feeder cattle markets will likely limit longer term support. Overall volume is expected to remain sluggish with traders focusing on the ability to spark additional support through the complex before year end. Cash cattle markets remain quiet with bids unavailable through the morning so far. It is expected that packer interest through the day, although active trade may not be seen until late Thursday or more likely sometime Friday. Asking prices remain at $122 to $125 live basis and $194 and higher dressed. Open interest Wednesday added 819 positions (332,717). Spot December lost 476 positions (925) and February contracts added 124 positions (120,376). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: 50 cents to $1 lower. Moderate pressure is quickly developing in nearby feeder cattle trade as traders not only focus on the ability to square positions at the end of the year, but also create some additional uncertainty in the market as traders focus on light volume expected both Thursday and Friday. This may keep prices under pressure during the entire session, but the overall tone of the market has firmed going into early January. Cash lean index for 12/26 is listed at $148.36, down 0.36. Open interest Wednesday lost 665 positions (51,985).

LEAN HOGS:

Open: Mixed. The choppy but mixed trade seen midweek has quickly carried over to trade early Thursday morning. This has allowed for prices to remain stuck from 30 cents lower to 5 cents per cwt higher as traders focus on the overall lack of new market information through the end of the year. With trade volume sluggish, it is likely that the lean hog market will remain in the current range over the near future. Cash bids are steady to $1 per cwt higher. Most bids are 50 cents to $1 higher. Open interest Wednesday added 4,306 positions (235,939). Spot month February added 61 positions (87,884) and April added 3,201 positions (65,286). Cash lean index for 12/26 is $61.59, down 0.03. DTN projected slaughter for Thursday is 465,000 head. Saturday runs are expected to near 385,000 head.

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

(SK)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.