DTN Before The Bell-Livestock

GENERAL COMMENTS

Strong gains are seen early Wednesday morning with traders focusing on the ability to bring increased market support back to the complex. Triple-digit gains in nearby live cattle futures are leading additional buyers to the market. Hog futures are pulling back from aggressive trade with buyers trying to find some market stability. Corn prices are higher in light trade. Stock market futures are higher, Dow Jones is 80 points higher while Nasdaq is up 12 points.

LIVE CATTLE:

Open: 50 cents to $1 higher. Gains were quick to develop across the live cattle complex. This is helping to bring about increased market access to not only February futures but all nearby contract months. There is likely to be some follow through buyer interest through the rest of the morning, but traders are also closely focusing on the direction of cash and beef wholesale prices before the end of the week. Cash cattle markets are generally quiet with a few bids developing in the South at $118 live basis. This may continue to draw increased bids through the day, although active trade may not be seen until late in the week. Asking prices are seen at $122 live and $195 dressed at this point. Open interest Tuesday fell 176 positions (353,694). Spot February lost 4,843 positions (71,377) and April contracts gained 2,754 positions (138,957). DTN projected slaughter for Tuesday is 118,000 head.

FEEDER CATTLE:

Open: Steady to 60 cents higher. Firm follow-through buyer support is quickly stepping into feeder cattle markets as traders try to adjust to the early week support. This may help to draw increased trade activity through the entire market with buyers still uncertain about just how much follow through gains will develop through the rest of the month and questions about fundamental support. Cash lean index for 1/15 is listed at $119.41, down 0.54. Open interest Tuesday added 369 positions (52,434).

LEAN HOGS:

Open: Steady to 50 cents lower. Light activity is seen early Wednesday morning as traders try to square positions following the aggressive market losses that developed in the early part of the week. Nearby futures are holding moderate losses with the most aggressive pressure in front month February futures. The light volume may limit market movement through the rest of the complex. Cash bids are steady to $1 lower. Most bids are steady to 50 cents lower early Wednesday. Open interest Tuesday liquidated 1,845 positions (245,144). Spot month February fell 1,725 positions (41,237) and April added 3,052 positions (97,421). Cash lean index for 1/15 is $71.92, up 0.83. DTN projected slaughter for Wednesday is expected to be 465,000 head. Saturday runs are expected to be seen near 145,000 head.

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

(SK)

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