DTN Before The Bell-Livestock

GENERAL COMMENTS

Moderate to strong losses are seen in all livestock markets with feeder cattle futures leading the complex lower through the morning. Even though very limited volume is seen during the opening minutes of trade, the weaker tone continues to be very evident in all markets. Corn markets are higher in light early trade. Stock markets are lower, Dow Jones is 86 points lower while Nasdaq is down 46 points.

LIVE CATTLE:

Open: 10 to 50 cents lower. Live cattle futures remain the most stable of all livestock trade with losses hovering between 10 and 40 cent losses in most contracts during initial trade. But the fact that buyers were unable to step into the market and cover short positions is indicating that the building pressure in the entire livestock market may have additional strength through the end of the week. Cash market interest remains sluggish once again with bids hard to find through the morning. It is expected that packers will become more active through the morning, but given asking prices still expected to hold near $114 live and $180 and up dressed, is likely to delay active trade until sometime Friday. Open interest Wednesday gained 3,187 positions (339,434). Spot month October contracts lost 2,152 positions (29,050) and December contracts added 2,102 positions (127,973). DTN projected slaughter for Thursday is 119,000 head.

FEEDER CATTLE:

Open: $1 lower. Strong early morning pressure is seen through feeder cattle futures with nearby contracts holding $1 per cwt losses in the opening minutes of trade. The general pressure in all livestock markets as well as early morning support in the grain complex has set a weaker tone Thursday. Even though prices are still a significant distance from breaking through short-term support levels, the lack of momentum seen early in the week is a gut blow for the entire cattle complex. Cash index for 10/2 is listed at $157.84, up 0.02. Open interest Wednesday added 766 positions (58,116).

LEAN HOGS:

Open: 30 cents to $1 lower. Firm follow-through pressure has redeveloped Thursday morning following the aggressive midweek market tumble. The general market pressure that developed Wednesday has sparked renewed pressure in nearby trade as December contracts are holding losses of $1 per cwt just after opening bell. Selling momentum is not as uniform early Thursday as it was the previous day with deferred contracts holding losses of 30 to 35 cents per cwt in limited trade. Traders are looking for the potential to bring some stability into the market, and this will likely develop in deferred trade based on the continued strong demand support. Cash hog trade Thursday is expected steady to $1 lower. Most bids are steady. Open interest Wednesday fell 2,426 positions (227,817). Spot month October fell 1,680 positions (17,938) and December lost 2,026 positions (103,772). Cash lean index for 10/2 is $68.84 up 0.93. DTN projected slaughter for Thursday is at 472,000 head. Saturday runs are expected at 182,000 head.

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

(SK)

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