DTN Before The Bell-Livestock

Mixed Cattle Trade Seen Friday

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

Livestock futures are mixed with cattle trade holding narrow market moves as traders still react to moves seen Wednesday. Nearby firm gains are developing in hog trade. Markets are expected to remain sluggish through the morning with trade abbreviated Friday due to holiday trading schedules. Corn markets are lower in light early trade. Stock markets are lower, Dow Jones is 110 points higher Nasdaq is down 9 points.

LIVE CATTLE:

Open: Mixed. Live cattle futures are mixed in a narrow trading range early Friday morning. The strong post report gains seen Wednesday are being tested as traders have had a little more time to react to report numbers as they processed them over Thanksgiving celebrations. Limited activity is expected to be seen through the entire day, although early gains in nearby contracts could quickly erode through the morning. Cash cattle buyers appear to still gain access to more cattle before the weekend, as only very limited activity developed Wednesday. Asking prices are expected to be restated around $116 to $117 live basis and $180 to $182 following the supportive futures trade Wednesday. Bids may trickle into the market, with many packers trying to wrap up the week, but still gain enough cattle for needed procurement levels. Open interest Wednesday added 43 positions (340,132). Spot month December contracts lost 3,944 positions (42,162) and February contracts added 2,075 positions (129,150). DTN projected slaughter for Friday is 114,000 head.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

FEEDER CATTLE:

Open: Steady to 20 cents higher. Light follow through buyer support has quickly moved into feeder cattle trade early Friday morning. There still remains some spillover support from the bullish cattle on feed report seen Wednesday. But with more time to process the overall numbers, traders seem to be much less shocked by the lower cattle placement levels and could back away from Wednesday market surge. This actually started before markets closed Wednesday as contracts moved well off of midweek highs as traders left for the Thanksgiving break. It is possible that feeder cattle could move lower by the end of the session due to limited activity and traders adjusting positions. Cash index for 11/19 is listed at $147.40, up 0.31. Open interest Wednesday added 1,545 positions (49,222).

LEAN HOGS:

Open: Mixed. Despite the firm buyer support seen in cattle trade, limited activity is seen in the opening minutes of trade through the lean hog complex. This is posting narrowly mixed activity in summer 2019 contracts, while light to moderate gains are moving into nearby trade. The underlying firm tone seen in the market over the last week is expected to help spark some additional buyer interest despite the fact that overall market activity remains sluggish through the end of the week. Cash hog trade Friday is steady to $1.00 lower. With most bids are $1 lower. Open interest fell 378 positions (225,518). Spot month December slipped 2,374 positions (35,962) and February fell 133 positions (77,097). Cash lean index for 11/16 is $58.51 down 0.59. DTN projected slaughter for Friday is at 470,000 head. Saturday runs are expected to be seen at 361,000 head.

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

(BAS)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Rick Kment