DTN Before The Bell-Livestock

GENERAL COMMENTS

Sharp gains seen early in the session has pushed nearby contracts at or near limit gains in the first few minutes of trade. This may spark additional support late in the week. Corn markets are lower in light early trade. Stock markets are mixed, Dow Jones is 27 points lower higher Nasdaq is down 19 points.

LIVE CATTLE:

Open: Mixed. Live cattle futures have struggled to find a sense of direction over the last week, and Friday's moves early in the morning have continued that trend. Prices are contained with narrow market moves from 20 cents lower to 15 cents higher as traders are unable to spark any significant move in either direction. This could allow for markets to hover in the choppy but narrow range through most of the morning as traders look for additional direction from cash cattle trade and beef values. Cash cattle interest is improving slowly with bids developing through early morning activity. Bids are all over the place from $109 to $112 per cwt live and $176 dressed. In the same range at this point as were seen earlier in the week. Asking prices are still well above these levels at $116 and higher live and $180 dressed. It may be late afternoon before active trade develops. Open interest Thursday fell 311 positions (338,212). Spot month December contracts lost 3,742 positions (67,921) and February contracts added 5,201 positions (109,949). DTN projected slaughter for Thursday is 119,000 head.

FEEDER CATTLE:

Open: Mixed. Feeder cattle futures continue to focus on the overall lack of trade activity early in the session Friday. The firm gains seen Thursday is sparking some additional uncertainty through the market with traders looking for position taking and then the possibility of additional buyer support seen later in the session due to spillover momentum from hog trade. So far, cattle markets remain lightly traded in a narrow to moderate range as most contracts are steady to weak Friday morning. Cash index for 11/14 is listed at $148.93, down 0.43. Open interest Thursday added 62 positions (49,127).

LEAN HOGS:

Open: $1 to $2 higher. Active support has quickly moved back into lean hog futures trade following a combination of commercial and noncommercial buyer support seen early Friday. This has moved February contracts limit higher in early trade as the focus on renewed support is developing ahead of the weekend break. The refreshed buyer support sparked by still firm pork demand and the potential that longer-term export growth may develop is helping to move prices to the top end of short-term ranges. Cash hog trade Friday is expected steady to $1 lower. With bids scattered through the range. Open interest fell 5,125 positions (237,066). Spot month December slipped 3,981 positions (55,802) and February added 6,187 positions (79,445). Cash lean index for 11/14 is $59.86 down 0.67. DTN projected slaughter for Friday is at 470,000 head. Saturday runs are expected to be seen at 276,000 head.

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

(BAS)

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