DTN Before The Bell-Livestock

GENERAL COMMENTS

Strong triple-digit gains have flooded into nearby lean hog futures trade with spot month December contract holding a $2 per cwt rally in early morning trade activity. Corn markets are higher in light early trade. Stock markets are mixed, Dow Jones is 2 points higher while Nasdaq is down 44 points.

LIVE CATTLE:

Open: Steady to 50 cents higher. Firm buying support is moving into nearby live cattle trade with the focus on additional buyer stability helping to spark increased market support through the early part of the week. December contracts are leading the complex higher with a 52 cent per cwt in the early minutes of trade as there continues to be focus on traders stepping back into the market early in the week. Cash cattle markets remain quiet with show list distribution and inventory taking the extent of expected trade through the day. Open interest Friday liquidated 4,563 positions (330,749). Spot month October contracts lost 1,427 positions (12,138) and December contracts slipped 1,920 positions (123,002). DTN projected slaughter for Friday is 118,000 head.

FEEDER CATTLE:

Open: Mixed. Trade in the feeder cattle futures complex remains sluggish with contracts holding a narrowly mixed trading range from 27 cents lower to 25 cents higher. Nearby contracts are trading in a much narrower range with prices from 15 cents lower to 10 cents higher as traders focus on potential outside market direction and shifts in live cattle trade through the morning. Traders are looking for an opportunity to bring some stability back to the feeder cattle market following aggressive losses last week. Cash index for 10/11 is listed at $157.48, down 0.89. Open interest Friday fell 1,093 positions (56,653).

LEAN HOGS:

Open: $1 to $2 higher. Sharp early morning buyer support has quickly flooded through the entire lean hog complex with front month December contracts leading the market higher with a $2 per cwt. With October futures expiring at the end of last week, December contracts have not taken over as official front month futures. At current price levels, there is expected to be some additional buyer support moving into nearby contracts while deferred futures remain very lightly traded. Cash hog trade Monday is expected steady to $2 lower. Most bids are $1 lower. Open interest added 298 positions (229,968). Spot month October fell 410 positions (11,309) and December slipped 68 positions (101,212). Cash lean index for 10/11 is $68.99 down 0.29. DTN projected slaughter for Monday is at 469,000 head.

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

(SK)

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