DTN Before The Bell-Livestock

GENERAL COMMENTS

Limited pressure is slowly trickling through livestock trade Tuesday morning as traders attempt to adjust to moderate to strong gains seen early in the week. Limited volume is keeping prices contained to a narrow range in most contracts as traders look for direction inside and outside the meat complex. Corn markets are higher in light early trade. Stock markets are mixed, Dow Jones is 32 points higher while Nasdaq is down 5 points.

LIVE CATTLE:

Open: 10 to 30 cents lower. Narrow losses have slowly trickled into the complex Tuesday morning with very limited activity seen across the complex. There continues to be limited market uncertainty following the previous market support, but sluggish volume seems to be one of the main focuses of trade activity through the complex. The potential to slowly expand losses during the first hour of trade could limit the ability for buyers to step back into the market over the near future. But given the fact that markets still remain at or near season highs, is helping to bring additional support to the entire complex. Cash market activity is expected to remain extremely sluggish through most of the day. Bids and asking prices remain undeveloped through the morning Tuesday and given the overall lack of incentive for either side to move into the complex, it is likely that additional direction will be delayed until the second half of the week. Open interest Monday gained 4,252 positions (334,921). Spot month October contracts lost 1,448 positions (34,381) and December contracts fell 555 positions (124,202). DTN projected slaughter for Tuesday is 119,000 head.

FEEDER CATTLE:

Open: Mixed. Limited activity is seen early Tuesday morning as traders are focusing outside markets which are trying to adjust for wide previous gains and make market corrections early Tuesday. This is leaving nearby feeder cattle futures under light to moderate pressure, following the shift lower in live cattle trade. Deferred contracts remain slightly higher with very limited volume as traders continue to focus on the overall buyer support developing across the complex. Cash index for 9/28 is listed at $157.48, up 0.59. Open interest Monday added 541 positions (57,165).

LEAN HOGS:

Open: Steady to 80 cents lower. Early activity is focusing more on market adjustments and trade corrections following the previous two sessions holding triple digit gains. This is leaving the market open for some market shifts due to the very limited volume seen moving into the market Tuesday morning. The underlying tone of the complex remains firm, but the potential to shift markets lower in the first hour of trade based on limited activity may be the biggest market movement seen early Tuesday. Cash hog trade Tuesday is expected steady to weak. Most bids are steady. Open interest Monday gained 8,410 positions (232,963). Spot month October fell 1,420 positions (21,173) and December gained 2,477 positions (109,785). Cash lean index for 9/28 is $67.26 up 0.81. DTN projected slaughter for Tuesday is at 471,000 head.

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

(SK)

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