DTN Before The Bell-Livestock

GENERAL COMMENTS

Early trade is mixed to mostly higher with firm early trade moving into the cattle complex. Hog markets remain extremely sluggish with very limited overall market support seen through the complex. Corn markets are mixed in light early trade Friday. Stock markets are higher, Dow Jones is 31 points higher while Nasdaq is up 11 points.

LIVE CATTLE:

Open: 10 to 60 cents higher. Firm support is moving back into the market, although traders seem unwilling to become overly aggressive at this point. October futures are leading the complex higher with nearby contracts trading near $111.50 per cwt. The target point of $112 per cwt still remains in the back of many traders minds. This is the resistance level needed to break out of the long-lasting sideways trade seen through the summer months. It is uncertain that with the limited market interest seen at the end of the week if strong buyer support will be able to close above this level, but if markets do make it to this price point, the direction of the market could change over the remainder of the month. Cash cattle bids have redeveloped through the complex with bids seen at $106 to $108 live and $170 dressed. This has firmed from earlier in the week, but still not at a point where feedlot managers feel comfortable pulling the trigger. Trade may be delayed until midday or later. Open interest Thursday gained 4,618 positions (303,390). Spot month October contracts lost 4,446 positions (71,111) and December contracts added 3,156 positions (95,567). DTN projected slaughter for Friday is 116,000 head.

FEEDER CATTLE:

Open: 20 to 60 cents higher. Limited activity is seen early Friday morning, although traders seem to be focusing on the overall lack of direction in the complex. This may add some additional volatility through the complex with traders looking for increased market interest later in the session. The firm gains is helping to build confidence through the end of the session and help to sustain midweek gains. But it is uncertain just how much follow through buying will develop and if this can sustain buyer activity through the end of the session. Cash index for 9/12 is listed at $152.60, down 0.03. Open interest Thursday added 550 positions (51,249).

LEAN HOGS:

Open: Mixed. Narrow trading ranges are seen early Friday morning with overall lack of support expected to be seen through the rest of the week. Prices are hovering from 35 cents lower to 30 cents higher as traders seem comfortable holding onto recent market support and waiting for additional direction next week. This may add some additional uncertainty to the complex through the rest of the session. Cash hog trade Friday is expected steady to $1.50 higher. Most bids are $1.00 per cwt higher. Open interest Thursday added 2,948 positions (226,695). Spot month October fell 6,396 positions (52,747) and December added 7,428 positions (91,378). Cash lean index for 9/12 is $50.08 up 1.54. DTN projected slaughter for Friday is at 400,000 head. Saturday runs are expected at 160,000 head.

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

(SK)

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