DTN Before The Bell-Livestock

GENERAL COMMENTS

Mixed trade is seen through all livestock trade with the general tone of firming market prices continues to be well rooted in live cattle and lean hog futures trade. The entire complex looks more like it is focusing on pre-holiday stability rather than continuing the aggressive market support seen late last week in hog futures. Prices may be limited to light to moderate moves through the complex as trade activity is expected to slow as the week continues. Corn markets are lower in light early trade. Stock markets are lower, Dow Jones is 116 points lower higher Nasdaq is down 82 points.

LIVE CATTLE:

Open: Mixed. Firm gains have quickly developed Monday morning into nearby live cattle trade. This renewed support across the complex has helped to bring about light but supportive trade activity in late 2018 and early 2019 contract months with December contracts nearing $116 per cwt following a 50 cent gain through morning trade. The focus on the potential to spark additional beef demand through the end of the year and early 2019 despite the poultry rich holiday season, has moved nearby contracts nearly $1.50 per cwt off of November lows as additional commercial interest is moving into the market. Cash cattle activity is expected to remain sluggish Monday with show list distribution and inventory taking seen through the day Monday. With the upcoming holiday, both sides are expected to want to get business done by Wednesday afternoon before the Thanksgiving break, in order not to hinder holiday dinner with thoughts of cattle still needing to be traded on Friday. This could allow some bids and asking prices to be seen Tuesday as both sides seem willing to focus on expediting the process. Open interest Friday fell 1,331 positions (338,525). Spot month December contracts lost 6,965 positions (52,416) and February contracts added 4,134 positions (121,665). DTN projected slaughter for Monday is 119,000 head.

FEEDER CATTLE:

Open: Mixed. Most nearby feeder cattle futures are trading steady to slightly lower with trading ranges in most 2019 contract steady to 5 cents per cwt lower. Narrow single digit gains are slowly developing in the front month January futures complex, although traders seem to be focusing on additional longer term activity across the complex. The early morning support in live cattle trade is expected to bring some additional underlying support back into the feeder cattle trade through morning activity. But gains are expected to remain limited without a strong market shift in outside trade or renewed activity in live cattle markets. Cash index for 11/15 is listed at $147.83, down 1.10. Open interest Friday added 878 positions (49,761).

LEAN HOGS:

Open: Mixed. Extremely limited activity is seen early Monday morning with narrow gains holding in nearby contracts as traders focus on additional market support following the move through short-term resistance levels last Friday. This has allowed generally firm buyer activity to be seen through the entire complex with the exception of limited losses seen in June and July futures. Trade volume is expected to remain limited through the entire week as traders focus on the upcoming holiday break which will limit overall market participation. Cash hog trade Monday is expected steady to $1 lower. With bids scattered through the range. Open interest fell 174 positions (232,261). Spot month December slipped 1,328 positions (47,081) and February added 200 positions (78,176). Cash lean index for 11/15 is $59.10 down 0.76. DTN projected slaughter for Friday is at 477,000 head. Saturday runs are expected to be seen at 326,000 head.

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

(BAS)

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