DTN Before The Bell-Livestock

GENERAL COMMENTS

Gains have developed across livestock trade early Wednesday morning. The focus on aggressive triple-digit support flooding into hog trade seems to be sparking renewed market activity. Cattle futures are firming, but unable to show aggressive market gains due to limited trade activity and uncertainty about follow-through support through the end of the month. Corn markets are lower in light early trade. Stock markets are mixed, Dow Jones is 21 points higher while Nasdaq is down 34 points.

LIVE CATTLE:

Open: 30 to 60 cents higher. Firm but sluggish buyer support is moving into the live cattle complex early Wednesday morning. Traders are trying to offset a portion of the losses that quickly and aggressively developed through the market Tuesday. It is uncertain just how much long-term support will be seen over the next couple of days, but traders are trying extremely hard to establish a sense of stability through the entire market. Cash markets remain quiet early Wednesday morning with bids expected to become more developed as the day continues. It is likely that little to no trade will be seen through the day with most active sales likely to be pushed off until sometime Thursday or Friday. Open interest Tuesday gained 1,160 positions (331,946). Spot-month October contracts lost 795 positions (3,473) and December contracts added 41 positions (121,265). DTN projected slaughter for Wednesday is 118,000 head.

FEEDER CATTLE:

Open: 20 to 50 cents higher. Initial support has quickly moved into the feeder cattle futures as traders focusing on short-covering activity following the moderate to strong losses which developed Tuesday. It is uncertain just how deep current buyer support will be through the morning as lackluster trade volume is expected. This may limited additional buyer support and could allow for mixed prices to be seen later in the morning. Cash index for 10/22 is listed at $155.06, down 0.31. Open interest Tuesday fell 787 positions (52,597).

LEAN HOGS:

Open: $1 to $2 higher. Strong underlying support is quickly moving back into the lean hog complex Wednesday morning with December and February contracts holding $2 per cwt gains. This surge higher is expected to help spark some additional underlying support through the entire complex with traders attempting to offset pressure in early October. Cash hog trade Wednesday is expected steady to $1 lower. Most bids are steady. Open interest fell added 1,558 positions (222,379). Spot month December gained 713 positions (99,927) and February added 843 positions (44,287). Cash lean index for 10/22 is $65.95 down 0.48. DTN projected slaughter for Wednesday is at 475,000 head. Early Saturday runs are expected at 192,000 head.

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

(SK)

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