DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed livestock trade is seen early Thursday morning. The strong limit-higher moves in lean hog trade Wednesday is sparking some mixed uncertainty through the hog complex. Cattle trade remains mixed to mostly lower although pressure remains limited at this point. Corn markets are lower in light early trade. Stock markets are higher, Dow Jones is 233 points higher while Nasdaq is up 143 points.

LIVE CATTLE:

Open: Mixed. Limited trade is seen early Thursday morning with very light activity seen in all markets. Limited gains are seen in spot month October trade, but the limited activity that is still in the October contract month may limit any significant market moves. December and February contracts are leading the complex lower as positioning moves following midweek gains seem to be the main focus across the complex. Limited activity is expected to be seen through most of the session with traders looking for direction from cash markets through the end of the week as well as movement in other livestock trade. Cash markets are still quiet with bids undeveloped through the morning as of yet. Asking prices are seen at $115 and higher live and $178 to $180 dressed, although it may be late Thursday or sometime Friday before active trade develops. Packer interest is expected to improve through the day, but this may not spark immediate buyer activity. Open interest Wednesday gained 1,039 positions (332,668). Spot month October contracts lost 974 positions (2,499) and December contracts added 19 positions (121,082). DTN projected slaughter for Thursday is 118,000 head.

FEEDER CATTLE:

Open: 40 to 80 cents lower. Early pressure is slowly moving into feeder cattle trade as the light support seen in most contracts Wednesday is not able to convince most traders that additional support will develop over the near future. Traders remain concerned about outside market weakness and how this will impact not only beef demand and movement, but also other commodity markets. The direction of grain markets continues to be a significant factor in feeder cattle trade due to the effect on production costs. Cash index for 10/23 is listed at $154.93, down 0.13. Open interest Wednesday fell 439 positions (52,149).

LEAN HOGS:

Open: Mixed. Early moves in lean hog trade are mixed in a moderate range following limit gains Wednesday that allowed for expanded trading limits through the Thursday session. As of now, it does not appear that traders are focused on enacting the expanded price ranges with prices hovering from 50 cents lower to 50 cents higher. Short covering seen in deferred trade is being offset by light follow-through buyer support in nearby contracts. Cash hog trade Thursday is expected steady to $2 lower. Most bids are steady. Open interest added 1,701 positions (224,064). Spot month December slipped 681 positions (99,246) and February added 176 positions (44,454). Cash lean index for 10/23 is $65.46 down 0.49. DTN projected slaughter for Thursday is at 476,000 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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