DTN Before The Bell-Livestock

GENERAL COMMENTS

Cattle futures have turned lower early Tuesday morning with traders seemingly back to full swing following the sluggish, holiday induced market activity Monday. Hog trade remains mixed in a moderate direction as additional trade activity is expected to step back into the complex through the morning. Corn markets are lower in light early trade. Stock markets are higher, Dow Jones is 15 points higher while Nasdaq is up 51 points.

LIVE CATTLE:

Open: Steady to 40 cents lower. Light to moderate pressure is developing through the live cattle complex with nearby contracts holding losses of 20 to 40 cents per cwt. The general weakness in feeder cattle futures as well as lack of support early in the week in all cattle markets is adding to the underlying selling activity as more volume moves back into the market following the observance of Veterans Day Monday. Cash cattle interest remains quiet which is expected for a Tuesday morning. Bids may start to slowly develop over the last half of the day, although at this point any bids floated across the market are more to feel out the tone of the market than actual buying activity. Asking prices may be seen through the next couple of days, although active trade is expected to be pushed off until late in the week. Open interest Monday slipped 3,496 positions (335,684). Spot month December contracts lost 9,768 positions (73,851) and February contracts added 3,165 positions (104,917). DTN projected slaughter for Tuesday is 118,000 head.

FEEDER CATTLE:

Open: 20 to 80 cents lower. Light follow through pressure is slowly developing across feeder cattle trade with nearby contracts holding form 20 to 25 cent per cwt losses, although more aggressive pressure is seen in deferred futures due to the overall lack of volume in these markets. Although there is expected to be some additional trade activity compared to Monday, the overall direction of the market is still expected to remain sluggish. Cash index for 11/09 is listed at $150.59, down 0.04. Open interest Monday added 360 positions (49,578).

LEAN HOGS:

Open: Mixed. Limited trade has slowly developed across the lean hog complex following the strong triple digit gains which flooded the market Monday. With additional volume expected to move back into the complex, it is expected that traders will be split in their focus between follow through buying activity and position taking. The December contract continues to struggle gaining any sense of traction through the early part of the week. Markets may remain contained in a moderately mixed range through most of the morning. Cash hog trade Tuesday is expected 50 cents to $1.50 lower. Most bids are seen $1 per cwt lower. Open interest added 4,556 positions (235,631). Spot-month December slipped 4,393 positions (60,145) and February added 6,647 positions (73,258). Cash lean index for 11/9 is $61.87 down 0.90. DTN projected slaughter for Tuesday is at 475,000 head. Saturday runs are expected to be seen at 279,000 head.

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

(BAS)

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