DTN Before The Bell-Livestock

Gains Develop Early Monday

Rick Kment
By  Rick Kment , DTN Analyst
(DTN photo by Nick Scalise)
GENERAL COMMENTS

Limited activity is seen in all livestock markets as trade volume is expected to remain generally sluggish due to the observance of Veterans Day Monday. Even though markets remain open, overall participation on federal holidays is typically light, leaving markets with limited direction. Corn markets are lower in light early trade. Stock markets are lower, with the Dow Jones 172 points lower and the Nasdaq down 102 points.

LIVE CATTLE:

Open: Steady to 40 cents higher. Overall lack of trade volume early Monday morning is helping to allow traders to cover short positions seen late last week. Nearby gains are seen 10 to 35 cents per hundredweight (cwt) higher in the early minutes of trade, as volume is expected to remain sluggish through most of the holiday session. Trade continues to hover well within the wide sideways trading range seen through the last several weeks, with no indication that fundamental or technical market changes will break out of the current market range. This may allow prices to shift higher and lower through the next couple of weeks, as traders continue to closely focus on beef demand and longer-term cattle supplies. Cash cattle markets will remain quiet with showlist distribution and inventory-taking seen early in the week. With the country observing Veterans Day, overall activity is expected to remain light until later in the week. The moderate trade seen late last week should help to bring some market stability to the entire complex. Open interest Friday added 398 positions (339,943). Spot-month December contracts lost 8,437 positions (83,930), and February contracts added 3,293 positions (102,018). DTN projected slaughter for Monday is 114,000 head.

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FEEDER CATTLE:

Open: Mixed. Single-digit trading ranges are seen through the feeder cattle complex early Monday morning with traders expecting market movements to be very quiet through most of the session due to Veterans Day. This is creating some lackluster market activity, but may allow for some renewed buyer support to step back into the complex over the next several hours. Cash index for 11/08 is listed at $151.63, down $0.80. Open interest Friday fell 175 positions (49,215).

LEAN HOGS:

Open: 30 to 80 cents higher. Light-to-moderate buyer support is slowly developing across the lean hog complex early Monday morning. Trade volume is expected to remain sluggish in most markets due to financial institutions closed due to the federal holiday. This could allow for markets to maintain moderate trading ranges with limited volatility through the day. Commercial traders continue to still be generally active in the market, which is helping to spark some underlying support in nearby contracts through the early minutes of trade Monday. Cash hog trade Monday is expected steady to $1.50 lower. Most bids are seen $1 per cwt lower. Open interest added 4,315 positions (231,155). Spot-month December slipped 6,159 positions (64,541) and February added 6,732 positions (66,734). Cash lean index for 11/8 is $62.77 down $0.51. DTN projected slaughter for Monday is at 445,000 head.

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

(BAS)

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Rick Kment