DTN Before The Bell-Livestock

GENERAL COMMENTS

Early Thursday, December cattle and hogs are both trading higher, helped by a higher stock market and another week of decent export sales. Cash cattle trade is still on hold and may be waiting for Friday's Cattle on Feed report before activity picks up. Corn markets are slightly higher in light early trade Thursday. Most major stock markets are higher and Dow Jones is up 200 points.

LIVE CATTLE:

Open: 27 cents higher.

December cattle are up 0.37 early Thursday, helped by early commercial buying and a higher stock market that seems less worried about all the trade concerns. USDA's weekly export report showed 15,900 metric tons (mt) of beef sales last week, a decent amount that was also up from the previous week and showed Mexico and Hong Kong as top buyers. Cash cattle activity is on hold, and this week's trade may wait until after USDA's on-feed report at 2 p.m. CDT Friday. Wednesday's open interest increased 2,665 to 321,509. Spot-month October contracts dropped 2,014 to 54,163, and December added 2,338 to 112,429. DTN projected slaughter for Thursday is 119,000 head, up from 117,896 a year ago.

FEEDER CATTLE:

Open: 52 cents higher.

October feeder cattle are up 0.42, also with early help from commercial buying in the lead months. $160 per hundredweight (cwt) continues to hold as two-year resistance on the weekly chart, but last week's breakout is still holding firm, and we have to wonder if available feeder supplies are tighter than expected. The Feeder Cash index for 9/18 is listed at $153.08, down 0.54. Wednesday's open interest increased 258 to 54,249.

LEAN HOGS:

Open: 7 cents lower.

December hogs firmed quickly after the open and are trading up 0.37, while strong interest in the October has that contract trading up $1.02. Persistent buying interest in hogs the past month has been impressive and is creating some curiosity as to what we might see in next week's Hogs and Pigs report, due out on the 28th. Thursday morning's export sales report showed 22,900 mt of pork sold last week, another impressive total in a year of trade disputes. Mexico was the top buyer. Cash hog trade in expected at steady to $2 higher on Thursday. Wednesday's open interest fell 2,802 to 216,772. Spot-month October dropped 1,895 contracts and December dropped 800 contracts. Cash lean index for 9/18 is estimated at $55.99 up $1.41. DTN projected slaughter for Thursday is at 444,000 head, down from 457,533 a year ago.

Todd Hultman can be reached at Todd.Hultman@dtn.com

(SK)

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